Household debt soars
National household debt, a major economic risk factor, rose sharply last year, raising concerns about an increase in defaults, a private credit appraiser reported yesterday. At the end of December, financial institutions held 722.8 trillion won (US$642 billion) in outstanding loans to the household sector, up 6.9 percent from a year earlier, according to the Korea Credit Bureau. That figure included 124.1 trillion won in unsecured household loans, up 19.4 percent from a year earlier and 311.5 trillion won in mortgage loans, up 9.5 percent, it said. The bureau warned that an increase in interest rates would turn more household debts sour. At the beginning of last month the government launched a task force involving financial regulators, government officials, bankers and experts to curb the excessive growth of household loans.
JPMorgan staff probed
About 120 former and current employees of JPMorgan Securities Japan Co failed to declare more than US$8 million of income obtained through stock options, a report said yesterday. They bought shares in their employer’s parent company, JPMorgan Chase & Co, at a discount, but never declared the profit after selling, Kyodo News said citing unnamed sources, adding the total amounted to ￥700 million (US$8.4 million). Many of them are believed to have traded the shares in foreign accounts, which Japan’s taxation authorities have difficulty checking. Most of those involved amended their tax returns following inspections by the Tokyo Regional Taxation Bureau, Kyodo said.
TAA expansions expire
Tens of thousands of workers displaced by foreign competition face being excluded from a program to help them because of congressional disputes over federal spending and the administration’s trade policy. Expansions of the Trade Adjustment Assistance (TAA) program incorporated in the 2009 economic stimulus act expired on Saturday after efforts to extend them were rebuffed in the House of Representatives and Senate last week. Of the 400,000 workers certified to receive TAA services since the stimulus act passed two years ago, 170,000 might not have been eligible under the pre-2009 criteria, according to Labor Secretary Hilda Solis. The program has provided retraining and financial aid to trade-displaced workers since 1962. White House economic adviser Gene Sperling estimated that 155,000 US citizens will lose access to the job training if the expanded program is not continued.
Business up in Middle East
Construction contractors in the Middle East and North Africa are set to have higher earnings and improved backlogs in the fourth quarter as orders pick up, Deutsche Bank AG said. “Overall, we expect the MENA [Middle East and North Africa] contractors under our coverage to post an 18 percent quarter-on-quarter increase in earnings, after a dreadful third quarter,” analysts Nabil Ahmed and Athmane Benzerroug said in a report e-mailed yesterday. Construction firms were hit by slumping orders after the financial crisis caused half of all planned real-estate projects in Dubai to be canceled. Drake & Scull International PJSC remains the analysts’ top pick, the report showed. The Dubai-based construction and engineering company won US$2 billion of new contracts in Saudi Arabia, Abu Dhabi and Oman during the fourth quarter, outperforming competitors, Deutsche Bank said.