Late October, Brazil and Argentina announced that their governments would buy up private assets in financial markets.

Brazil’s plan would allow its state-controlled banks (Banco do Brasil and Caixa Economica Federal) to buy stakes in private financial institutions. Argentine President Cristina Fernandez de Kirchner announced that the government would take over the $30 billion private pension fund.

These announcements pushed Latin American markets well into the red, but they also knocked Spain’s Ibex index off 184 points, or 2%.

That should come as no surprise. Spain and Latin America have many economic ties, and some Spanish companies do so much business across the pond that 29% of net profits come from that region.

So when news of nationalization hit last week, naturally Spanish markets shuddered… With good reason.

Just look at Bolivia and Venezuela, both controlled by heavily nationalistic leaders.

Venezuela has had three major blackouts this year. Some areas spent more than two weeks without power at a time. Bolivia continues to buy up local and international stakes in its natural gas pipeline infrastructure, but it’s been shipping less than 50% of its contracted amount of natural gas to Argentina since September.

Problems like this led to a severe power crisis last summer, and forced Argentina to buy energy from Brazil.

So the question is… Will government intervention result in protection from global markets, or will pensioner and investors alike be holding worthless papers and wondering where all their money went?

And how will markets in both Latin America and Spain respond?

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Surprising news out of Argentina today: Ternium (TX:NYSE), a steel maker with operations in Argentina and Mexico, reported a 15% rise in net income (year on year).

But here’s the thing. That 15% rise is overshadowed by the fact that its net income of $247 million is only half that from the previous quarter. The main reason for this drop? Lower net foreign exchange results.

This wierd fluctuation is seen in the company’s EBITA. This figure grew 101% year over year in the third quarter, but is down 11% from the second quarter.

Next quarter, the company expects further contraction in income, which doesn’t bode well.

These kinds of earnings reports are going to become more prevalent, I think… So long as major currencies continue to seesaw back and forth.

You see, most international exporting companies have to hedge themselves against their own currencies. But with the global mayhem shoving some denominations higher and knee-capping others, it’s obvious that some companies are going to be left holding the short end of the stick.

Argentina’s in that bracket.

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News from Asia Times Online has a tiny Caspian county rivalling Mother Russia for regional energy dominance.

In an announcement on October 13, British consultant group Gaffney, Cline & Associates valued Turkmenistan’s natural gas resources for its new Yoloten-Osman field at 4 trillion cubic meters… at least.

On the high side of the estimate, this field could contain as much as 14 trillion cubic meters.

The U.S. consumes 604 billion cubic meters a year, so this is a massive find! It’s also five times the size of Turkmenistan’s previous favorite field.

This new reserve estimate came as a big shock to Russia’s Gazprom (GAZP:Russia), who’d picked up a giant contract with Turkmenistan’s state-owned energy company, Turkmengaz. The contract, signed on July 25 earlier this year, meant Turkmenistan would export 50 billion cubic meters a year to Russia through 2009. Gazprom needs these exports to meet its contracts with Europe, as the company exports about two-thirds of its total production.

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As the bottom falls out of the dollar, and people’s cash goes up in a mushroom cloud of smoke, someone’s going to make a lot of money… from foreign currencies

I’m reading all the front pages this morning, and I’m seeing nothing but fear:

Bloodbath
Global Rout
Panic Selling
Roller Coaster

It’s enough to make seasoned brokers and pit traders jump out of windows, not to mention the folks who’ve watched their retirement funds lose $2 trillion (over the past year and a half). It is truly a global market meltdown.

And it would seem that there’s no safe place to run anymore. Even commodities are flopping like a fish out of water.

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