Everyone is freaking out because Argentina is renationalizing its formerly state owned oil company, YPF:

Argentina says it will seize a controlling interest in oil company YPF that is owned by Spanish firm Repsol.

President Cristina Fernandez said a bill would be presented to the Senate allowing the government to expropriate 51% of YPF shares.

The move, announced on national television, was welcomed by her cabinet and Argentina’s regional governors.

Spanish Foreign Minister Jose Manuel Garcia Margallo said the action had “broken the climate of friendship”.

Speaking after a government crisis meeting, Mr Margello told journalists his government would take “clear and forceful measures”, although he did not specify what these would be.

In a statement Repsol said it “considers the announced measure to be manifestly unlawful and gravely discriminatory”.

The sale of the former state owned energy company was in the middle of the Argentine financial crisis, when creditor nations held a figurative gun to the Argentine government’s head, so it was sold at fire sale prices.

As to concerns about Argentina no longer being “friendly” to foreign investment, it’s not a big deal.

Argentina has been growing more rapidly than all of its neighbors, including the vaunted Brazil.

Additionally, foreign investment won’t go away, though it might demand an additional 50 basis points return.

Also, reduced foreign investment also less risk of the speculative inrushes that cause crashes which result in the loss of economic sovereignty and a shredding of middle class.

The recent lesson of Argentina, and of Iceland, as well as that of Malaysia during the Asian financial crisis, is that the so called Washington consensus, that currency speculation and completely unimpeded capital flows, that this will produce unparalleled economic growth, is completely wrong.

This is not an expropriation, this is justice. The assets were stolen by the looters in the first place.