Argentina's President Cristina Fernandez has signed a bill that will nationalise the country's 10 private pension funds.
The move will put the government in control of almost $30bn (£18bn) of investments and is aimed at protecting them from the global market turmoil.
Shares slumped amid fears of the move's impact and critics accused the government of trying to grab the funds.
The bill needs the backing of Congress, where the ruling party has a majority.
Argentina's pension funds were struggling with corruption and the country of Argentina was struggling to make payments on its own debts. This move was supposed to calm the panic setting in on the country.
So, how has the move been seen in the country? The Argentine stock market has spoken.
THE main stock index in Argentina plunged more than 16 per cent overnight, after the president announced plans to nationalise private pension funds. Markets also fell 11 per cent on Tuesday.
President Christina Kirchner moved to nationalise $US30 billion ($A44.3 billion) in private pension funds yesterday, saying it was necessary to protect retirees in the global financial crisis.
Some analysts saw the move as a tactic by the government to get hold of cash to help service the national debt of some $US150 billion ($A221.5 billion). Argentina defaulted on its debt in 2001.
In fact, the market has lost more than a quarter of its value only four days prior. Rather than calming the market, this bold government intervention has only put them into more of a panic.
There is of course a bit of cruel irony in a third world government with a long history of its own corruption attempting to nationalize an industry in order to root out corruption. Maybe, that's one reason why the market has responded as it has. Furthermore, maybe just maybe, the markets know better than bureaucrats and policy makers. No matter how dire the situation Socialization and nationalization isn't the way to go. The government which intended to help only made things worse and once again Ronald Reagan was right
the nine most terrifying words in the English language are 'I'm from the government and I'm here to help'
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