Dear CIGAs,

Tanzania is a country that is growing significantly.

Tanzania expects sovereign rating in 7-8 months
Mon May 31, 2010 11:35am GMT
By Martina Fuchs and Moira Sidoti

DUBAI (Reuters) – Tanzania plans to issue a debut Eurobond soon after it gets a sovereign rating in the next seven to eight months, the country’s central bank governor told Reuters Insider in an interview.

Tanzania shelved plans to issue a debut sovereign bond because of the global financial crisis but revived the plan in January. In May, the finance minister said it would take at least 12 months to complete the process and Tanzania would plug a financing deficit with syndicated loans.

"We are in preparation right now to restart the country rating, sovereign rating. We are procuring now an advisor for a sovereign rating and for working alongside us," Bank of Tanzania Governor Benno Ndulu said on the sidelines of the WEF Global Redesign Summit 2010 in Doha.

"The rating, we hope in the next 7 to 8 months to have that out of the way and follow quickly with the issuance," he said, without giving details about the size of the planned issue.

Ndulu also told Reuters Insider that central bank intervention to prevent the Tanzanian shilling weakening was not necessary and that an increase in Tanzania’s inflation rate in April was due to rising food and oil prices.

Tanzania’s year-on-year inflation rose to 9.4 percent in April from 9.0 percent the previous month.

"The cause of the rise is not actually monetary-based. It’s been essentially exogenous because of the increase in food prices and the increase in oil prices, which are both outside of the control of monetary policy," Ndulu said.

"But what we have done is try to compensate for that by tightening slightly more our monetary policy so that the pressure on prices would be relieved," he said.

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Jim Sinclair’s Commentary

The time is very soon. Currency traders and holders will have to decide which is the greater bankruptcy, the dollar or the euro.

Chapter 9 is disaster for everyone except the debtor.

Bankruptcy talk spreads among Calif. muni officials
Jim Christie
Thu May 27, 2010 4:51pm EDT

(Reuters) – Two years after Vallejo, California, filed for bankruptcy protection, officials in nearby Antioch are also tossing around the ‘B’ word.

Antioch’s leaders earlier this month said bankruptcy could be an option for the cash-strapped city of roughly 100,000 on the eastern fringe of the San Francisco Bay area.

Antioch’s fiscal woes are standard issue for local governments in California: weak revenue from retail sales and property taxes is forcing spending cuts, layoffs and furloughs.

But cost-cutting measures may not be enough to keep Antioch’s books balanced, so its city council is openly discussing bankruptcy.

"We just want to alert people to the possibility," Antioch Mayor Pro Tem Mary Helen Rocha said.

Orange County Treasurer Chriss Street would not be surprised if more local governments across the Golden State sound a similar alarm.

Street expects more talk of municipal bankruptcy across California because local government finances are in such dire shape — a situation underscored on Wednesday when a top finance officer for Sacramento County projected a worse-than-expected shortfall for the county of $181 million, which could force more than 1,000 layoffs from the county’s payroll.

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Jim Sinclair’s Commentary

Goldman must settle to avoid slam dunk civil liability. With the power of the Dark Side it will settle.

Goldman Seeks to Settle With Lesser Charge
May 28, 2010, 5:40 AM

Goldman Sachs is looking to avoid a charge of fraud from the Securities and Exchange Commission by coming to a settlement over a lesser offense, The Financial Times reported, citing people familiar with the bank’s negotiating position.

The move would mean Goldman accepting a fine of hundreds of millions of dollars, but would aim to cap the furor that has dogged the bank since the Abacus scandal broke.

Negotiating a lesser charge in fraud cases is not an unusual procedure — it would reduce the risk of Goldman’s being involved in a lawsuit with its investors and avoid the further damage that settling a fraud charge would do to the reputation of the bank, The FT said.

Despite this precedent, it is not clear if the S.E.C. will accept such a move in so public a case, The FT said. The S.E.C. declined to comment.

Since the S.E.C.’s suit was filed against the bank on April 16, Goldman’s public standing and stock price have been badly hit. A settlement for a lesser offense may help the bank stage a rebound, The Wall Street Journal said. However, a move to settle may also lead to criticism that the S.E.C. backed down on the issue.

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Jim Sinclair’s Commentary

Very dangerous developments.

Turkey threatens action; Israel on alert
Posted on May 31, 2010 at 19:28

New Delhi: Turkey has threatened Israel with unprecedented action after Israeli forces attacked an aid vessel, killing 10 peace activists headed to Gaza.

Israel said 10 people died while those on the ship said at least 15 were killed.

A shocked world has responded with outrage. Turkey recalled its ambassador to Israel and warned of unprecedented and incalculable reprisals.

Two Turkish activists were reported to be among those killed in the flotilla. Ankara warned that further supply vessels will be sent to Gaza, escorted by the Turkish Navy, a development with unpredictable consequences.

Israel has sounded an alert throughout the country fearing rocket attacks by Hezbollah in Lebanon.

The Arab League has called an urgent meeting on Tuesday to decide on a common response. Egypt is under pressure to end the blockade of Gaza while Greece has cancelled a military exercise with Israel.

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Jim Sinclair’s Commentary

The greatest risk to the manufacturers and distributors of OTC derivatives is not civil action, but rather criminal action that cannot be settled.

Italy’s Municipalities Face Derivative Losses of $1.4 Billion
By Elisa Martinuzzi

May 31 (Bloomberg) — Italian municipalities face losses of about 1.1 billion euros ($1.4 billion) on derivative contracts with the country’s banks, outstripping gains by 11 times.

Combined losses at the end of March 2010 compared with an estimated 100 million euros of gains on derivatives among Italian regions, cities and towns, data from the Bank of Italy show. At 227 million euros, local authorities of Campania have the largest so-called mark-to-market losses among the country’s 20 regions, according to the data.

Four banks are on trial in Milan for fraud in the sale of derivatives to the city, a case that may set a precedent for other municipalities, while Bari prosecutors are investigating Bank of America Corp. and a unit of Dexia SA for misleading the region of Puglia on swaps. Italy’s Senate Finance Committee in March proposed restricting derivatives to larger towns and banning some swaps altogether.

The Bank of Italy data is based on derivative agreements with domestic banks and local units of foreign institutions. The mark-to-market losses, because theoretical, aren’t included in municipalities’ debt calculations, the central bank said.

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Jim Sinclair’s Commentary

Although the economic impact on the area is the least important factor to consider in the already epic disaster, it is just another nail in the economic malaise coffin.

BP’s latest slip-up has U.S. ‘preparing for the worst’ of oil spill
Shawn McCarthy and Josh Wingrove
From Monday’s Globe and Mail Published on Sunday, May. 30, 2010 9:08PM EDT

Another capping attempt, another failure, and now the Obama administration is preparing the American public for the worst: the possibility that BP’s blown-out well could gush for another two months with near-apocalyptic impact on the Gulf of Mexico’s environment and economy.

BP has scrapped its “top kill” effort to plug the well by injecting heavy drilling mud into it, and was preparing on Sunday to deploy another strategy: a cap that would allow the company to cover the well and siphon the crude into tankers waiting 1,500 metres above the sea floor.

But a senior White House official warned that BP is running out of options to contain the spewing oil, and the end may not come until it can complete the drilling of two relief wells, expected some time in early August.

“We are hoping for the best and preparing for the worst,” Carol Browner, White House adviser on energy and the environment, told CBS’s Face the Nation on Sunday. “The worst is that we have oil leaking until August, until the relief wells are done.”

BP managing director Robert Dudley expressed some optimism that the next effort, known as a cap-containment system, would succeed even though a similar approach had to be abandoned two weeks ago when crystals formed and blocked the tubing. He said BP has devised a way to heat the tubing to keep ice crystals from forming.

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Jim Sinclair’s Commentary

Geopolitics are certainly heating up.

China ‘will not protect’ Korea ship attackers

China "will not protect" whoever sank a South Korean warship in March, Premier Wen Jiabao has said.

"China objects to and condemns any act that destroys the peace and stability of the Korean peninsula," Mr Wen was quoted as saying after talks in Seoul.

South Korea has blamed the North for sinking the Cheonan with a torpedo.

Beijing is under pressure to take a strong stance against North Korea but so far has not accepted the findings of an independent investigation.

"The Chinese government will decide its position by objectively and fairly judging what is right and wrong about the incident while respecting the international probe and responses to it by each nation," said Mr Wen.

Beijing has previously called for all sides to show restraint.

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Jim Sinclair’s Commentary

Coming soon to your neighborhood lake!