Yesterday, I told Taipan Insider readers that Argentina's penion nationalization left much to be desired in the way of transparency. On Monday, a federal judge froze assets here in the U.S. in connection with the pension. Read my full Taipan Insider article (available to all Taipan Publishing Group members) for all the details. But that's not the end of the nationalization trend. Actually, it's not the beginning either. The timeline can get a bit confusing, so try and stick with me... On May 25, 2003, Nestor Kirchner was elected president of Argentina. He was elected by default, however... The main candidate, former President Carlos Menem, withdrew from the race for fear of a run-off election that he felt he could not win. He was a popular president, though, with one of his notable acheivements being the renegotiation of Argentina's massive debt from defaulted loans with the IMF. He successfully dropped the payback amount to about one-third of the original amount. But in the background, President Kirchner was creating state-owned companies and nationalizing a number of industries: energy, railways, water companies, and telecoms. The Economist wrote about him on August 10, 2006, "By founding state-owned enterprises and re-nationalising privatised ones he has expanded the executive's power over employment and prices... His biggest triumph came on August 3rd, when Congress gave him authority to reallocate government spending as he sees fit." That's in line with some of Kirchner's closest allies, like Evo Morales, president of Bolivia, and Hugo Chavez, president of Venezuela. Even the leftist Lula da Silva, president of Brazil has some nationalization tendencies. (Read my blog post from Nov. 12 for more info.) So with so much of the countries infrastructure under the State's belt, what's left for private investors? Not much, and dwindling everyday, it would seem. The current President Kirchner - and here's where things get confusing - has just nationalized pensions and the struggling airline, Aerolineas. The current president of Argentina is Cristina Fernandez de Kirchner... Yes, Nestor Kirchner's wife. She came to power in October 2007, after winning 45.29% of the vote. Her husband, though immensely popular at the time, did not seek another term. It must have been the Kirchner name more so than the person herself that vaulted Christina Fernandez into the presidency. She's now less popular with her citizens than George Bush is in the U.S. That's due in part to a plan to increase tariffs on food exports that was released in April 2008. Once sporting a polished 57.8% approval rating, President Kirchner's number plummeted to an anemic 23%. They have yet to recover. The Argentine people are not very trusting when it comes to their politicians, and once broken, that trust is nearly impossible to win back. Now, the country is split between accepting even more nationalization or bracing for further economic pitfalls. But in this situation these choices may be one in the same. Fitch Ratings has just downgraded several Argentine corporations on "heightened concern about Argentina's fiscal and external financing requirements." Turns out, that's a pretty good assessment of where Argentina's economy is at right now. While President Kirchner's 2009 budget is forecasting that the economy will grow at 4% next year, a Bloomberg survey suggests that the Argentine economy will shrink by 0.9%. This comes after the country posted the slowest growth pace in more than five years. Argentina is South America's second-biggest economy, and as such it attracts a large number of investors. But some critics of the nationalization trend suggest that these recent moves are scaring off investors. A Los Angeles Times article reports, "[President Kirchner] also unveiled a $90-million loan program for the hard-hit tourism industry. That comes on top of a multibillion-dollar public-works program and subsidized loans for auto purchases. She also nationalized $30 billion in private pensions in a move that spooked investors and sent the stock market tumbling." The latest in the nationalization plan is the struggling airline Aerolineas. The airline employs about 9,000 workers and accounts for about 80% of domestic flights, but they're deep in debt... And it's not the first time. Back in 2001, the airline was about to declare bankruptcy. (That's when Argentina had its horrible economic crisis and defaulted on about $95 billion in loans and bonds.) The airline was bought by Spain's Marsans, a travel group, which apparently has not done a good job managing it. The Argentine government says that the airline is about $900 million in debt, and has moved to take it off Marsans' hands. Today, Argentina's parliament has given the government a thumbs-up for a take-over. There's a bit of a problem, though. Marsans is contesting the take-over, saying the government is undervaluing the company. That was the factor that kept Marsans from selling the airline to the government months ago. To the government, it's just one thing in long line of state projects it wants to sweep under the rug and move on from. But can it? The government has been known to manipulate numbers, and has completely lost the faith of the people when it comes to economic stability. So will nationalization do anything but put a lot of the country's assets into the hands of a few politicians? It's hard to say, but one thing's for certain... The nationalization trend may not be over. Up next on the chopping block may be energy assets, as folks in Buenos Aires were demonstrating with heavy clubs and masked faces last Friday demanding the government nationalize Repsol YPF (REP:NYSE) and its assets. Go figure... But it seems I left there just in time.