Call it a triple-edged sword… or a dog and pony show with cats… or a rain of fire…

Or you can just call it plain old nonsensical. That’s what the past few days have been for Latin American markets. From the Mexican border to the tip of Cape Horn, Chile, markets have tumbled fiercely on the news that both Brazil and Argentina are injecting government into the private investment sector.

Brazil’s government wants its state-controled banks to buy stakes in private financial institutions. The announcement, made on Wednesday, did not include any names, but there are several well-known institutions that could be affected by this:

Banco Bradesco (BBD:NYSE)
Banco Itau Holding Financeira (ITU:NYSE)
Unibanco (UBB:NYSE)

Things may be a little worse in Argentina. President Cristina Fernandez de Kirchner announced that the government will take over the $30 billion private pension fund.

She said that Argentina must protect its retirees, and that the country’s constitution requires the president to provide pensions. Last year when the government allowed citizens to chose between privatized pensions and government pensions, only 20% of all people with pensions chose the government’s plan.

In response, markets plummeted.

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