Having laid off 10,000 employees (and boosted his share buyback program by $10 billion - because that has worked out so well in the past), it appears Schlumberger CEO Paal Kibsgaard unleashes some very uncomfortable truthiness on his audience this morning during the earnings call, in which he revealed what likely was a wake up moment of truth for the US energy sector:

For many of our customers, available cash and annual budgets were exhausted well before the halfway point for the fourth quarter... as pricing levels for frackers has dropped into unsustainable territory.

Kibsgaard started by explaining why his firm has unveiled the massive layoffs and cost cuts:

we have faced the most severe industry downturn in 30 years

Then explained that this situation is unsustainable for American frackers...

On land in both the U.S. and Canada, the weakening activity resulted in additional commercial pressure for all product lines, and in particular in pressure pumping, where pricing levels dropped further into unsustainable territory for both operating margins and cash flow.

Which means, the pain has already started...

The burgeoning market conditions added to the pressure to the deep financial crisis throughout the oil and gas value chain and prompted operators to make further cuts to the already low EMP investment levels. For many of our customers, available cash and annual budgets were exhausted well before the halfway point for the fourth quarter, leading to unscheduled and abrupt activity cancellations, creating an operating environment that is increasingly complex to navigate, and where the traditional year-end product and multi-client site mix sales were largely muted.

While not ready to call a bottom in the oil market for this year, Kibsgaard said he didn’t think 2017 would be worse... but then again he said that at the start of 2015 too?

Still who cares the stock price is higher... which is all that matters...

As Schlumberger's brand new "yield starved" bondholders will give the company $10 billion to create 10,000 new fast food jobs.

And that is what, as the US economy careens into recession, passes for growth. Anyone who says otherwise is peddling fiction.