So tonight we will leave Guatemala and fly first to San Salvador and then on to San Fransisco. Six days is not long enough time to do a country like Guatemala full justice, but we did manage to take a trip along the main gringo trail around the Guatemala City, taking in places like Antigua, Chichicastenanga and Panajachel. In addition it enabled us to skip the whole Bible and Jell-O Belt in favour of a very friendly and colourful country – all in all a good deal.
On the news front there was an interesting bit last week – in addition to recently overshooting their estimate on the cost of the UK bank bailout to the tune of £70 billion (missing the mark roughly by 50%), IMF was forced to aknowledge that their official figures on the Eastern European external debt levels were grossly overestimated. The ratio of external debt to foreign exchange reserves for the Czech Republic was adjusted from 236% to 89%, in the case of Estonia the respective cut was from initially reported 210% to somewhat more benign 132% – with more likely to follow. Unfortunately this doesn’t mean that all is well in the proverbial Kingdom of Denmark, and I for one wouldn’t expect investors rushing to buy CEE assets or setting up new factories now that they learned that the leverage is much lower than formerly thought. It does, however, mean that both the risk of a complete meltdown as well as the outcome, should it still happen, is a lot less drastic than it appeared before. With all that in mind, it is really interesting to note is how little attention did this news get. I suspect that had this thing been the other way around – i.e. IMF correcting the indebtness figures upward by about 2x – the whole thing would have been all over the place. I guess it simply goes to underline how scared everyone is – good news are treated as inconsequential as everybody knows that the situation is bad.