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Dances-W-waves

02/28/03 9:19 AM

#81325 RE: Zeev Hed #81322

"Anyone would like to guess if such a scenario has any "legs"?"

Interesting scenario.......


Lots of up and down for the markets while going nowhere, if that's the case....

Good for traders....

I give it 1 leg. <g>
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MKT_entropy

02/28/03 9:23 AM

#81327 RE: Zeev Hed #81322

Zeev, that would be a sad confirmation of the validity of "Like father, like son"...

M_e
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GAB

02/28/03 9:23 AM

#81328 RE: Zeev Hed #81322

Zeev.........I think Bush will act if SH does not comply soon. He is risking a second term, just like his father, with this economic malaise. Hope Saddam Insane backs down.


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baletwine

02/28/03 9:25 AM

#81331 RE: Zeev Hed #81322

Zeev,

"Could it be that Bush does not intend to actually go to war..." (?)

This has been in the back of my mind for awhile, but I keep coming back to how seriously his "face" could be lost w/o Hussein winding up very much out of power and very much dead.

To get from here to the spin that Bush is the Peacemaker and avoided war with a showing of real strength and serious threats will be an incredible spin job -- a remaking of his administration's angle entirely.

A dangerous gambit.

But they whipped us up into a frenzy last summer, and I suppose we can be whipped back out of it...

The length of time it takes and how the market reacts... Good Question!

-- Bale
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extelecom

02/28/03 9:25 AM

#81332 RE: Zeev Hed #81322

Zeev, I totally agree with your new scenario.. I have thought all along that we were merely taking the hard line with Iraq. We have stated many times that we do not want war, but Iraq must comply. Another possibility that the reason the munitions have not already been ordered is that we have plenty stock piled. I thing Irag has not intentions of disarming and your scenario would fit "their" plan well. My questions is how long will the likes of France, Russia China and others allow this to go on before they change their attitude? I do not think this new possible scenario bodes well for the current Turnip view!
Maybe we will shift our focus from IRAQ and deal with the Maniacs in Korea now to let Iraq play their game for a while...
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mainehiker

02/28/03 9:25 AM

#81333 RE: Zeev Hed #81322

Zeev ive never felt this war was a definate, a probable but not definate..ive said to several friends is this just a big planned bluff on bushes part, him knowing he probalby would not go to war, but go very close to it..hoping saddam would blink...if thats the case, and i have no idea, i would praise bush for the stategy, as someone who does not like bush, that says a lot form me..im just guessing, as everyone else; but the action in defense stocks is puzzling..as is ALOT..nore questions, few answers...if war is avoided for now zeez..with kind of the status quo, more gentle sable rattling from both sides...how much do you think they can ramp the markets..if they can..and will the reality of our economic troubles EVER casue the real washout alot of us want to see..
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MyHunch

02/28/03 9:26 AM

#81335 RE: Zeev Hed #81322

Good morning all. Interesting concept. If it indeed plays out the way you postulate, it would be the biggest red herring the world has ever seen, at the expense of hundreds of billions of public $s. That would also perhaps end Bush's political career.
I am more interested to know whether your nassacre scenario for 2003 will still happen or not if there was no war?

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phill

02/28/03 9:27 AM

#81336 RE: Zeev Hed #81322

Zeev, you've just described my "most likely" scenario.

Bush needs the afterglow of a successful war to be much closer in time to the 2004 election. He recalls that his father had 90%+ approval ratings at this time in 1991, benefited by the successful campaign against Iraq. ...and 20 months before his 1992 election loss.

The most likely plan is to be "reasonable" and let the UN, Saddam, etc, have more time. Presuming Saddam doesn't do much to demonstrate further disarmament, the Fall of 2003 becomes the perfect time to start a war and reap the benefit in the 2004 presidential campaign.

Regards,

phill
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integrivest

02/28/03 9:32 AM

#81339 RE: Zeev Hed #81322

Ze'ev:

Does your "something is quite fishy" insight mean that the GN03 is delayed, off or significantly skewed?

Thanks

Steve


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epsteinbd

02/28/03 9:33 AM

#81342 RE: Zeev Hed #81322

I disagree with that no war scenario. For many reasons. The main one remaining that Saddam, a pocket knife and a whip, make three weapons of mass destructions.
In Bush' view (and mine).
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extelecom

02/28/03 9:34 AM

#81343 RE: Zeev Hed #81322

Zeev, are those Gopher mounds I see in the Turnip Patch?<VBG>
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profit_guy

02/28/03 9:44 AM

#81352 RE: Zeev Hed #81322

zeev, what is the date at which you would say we will have "peace" (at least for 6 months)?...i assume it's if apr 16th passes without incident? (and the mkt will detect that long in advance, no doubt)

...in your recent posts, you seem to be thinking that war/GN '03 is much less of a possibility now?
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buddaa

02/28/03 9:47 AM

#81356 RE: Zeev Hed #81322

I believe that defense stocks also did poorly during Iraq's invasion of Kuwait back in August 1990 and did not rally until we moved in on January 17, 1991.
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mlsoft

02/28/03 9:52 AM

#81360 RE: Zeev Hed #81322

Zeev...

You may be correct, but my bet is still a 100% probability that we make war on Saddam unless he dies or leaves the country.

mlsoft
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Barry

02/28/03 10:01 AM

#81374 RE: Zeev Hed #81322

Well, if there is a delay in starting a war that may keep terrorist from doing anything for a while also. Their "leaders may tell them not to start anything so as not to give Bush a reason to attack. Therefore less fear in the market of an attack that would send the market down? HHHmmmmm??
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Hesperion

02/28/03 10:34 AM

#81411 RE: Zeev Hed #81322

Zeev,

I received the following from a friend that offers one perspective on the US/Iraq scenario.

Here is your complimentary Stratfor Weekly, written by our
Chairman and Founder, Dr. George Friedman.

Please feel free to email this analysis to a friend.

Iraq: Is Peace an Option?

Summary

For nearly a year, Iraq has been the centerpiece of U.S.
President George W. Bush's foreign policy. There were multiple
reasons for this obsession, but in the end, Bush created a
situation in which Iraq became the measure of his administration.
However, over the extraordinarily long run-up to a decisive
confrontation with Baghdad, massive, global opposition to U.S.
policy on Iraq has emerged on both the public and state levels.
Creating the sort of coalition that the United States enjoyed in
1991 has become impossible. This war, if it comes, will be fought
in the face of broad opposition. The question now has arisen as
to whether the United States would back away from war in the face
of this opposition. Our analysis is that, at this point in
history, the United States has few choices left: The constraints
that now surround U.S. policy indicate that Washington will have
to choose war.

Analysis


Over the past few weeks, the pressure against a U.S. attack on
Iraq has mounted intensely. Massive demonstrations were launched,
and nations that oppose war have not shifted their positions. But
the opposition is not decisive, in the sense that the United
States does not need the material assistance of anti-war nations
to invade Iraq, nor does the public barrage of opposition create
a material challenge to war. What these factors do is create is a
psychological barrier in which the sense of isolation has the
potential to undermine U.S. determination.

U.S. polls give some indication that this psychological dimension
is having some effect on Washington. The majority of Americans
continue to support a war, but the number is declining somewhat.
Moreover, the number of Americans who want to go to war only if
there military action is sanctioned by a U.N. resolution is quite
large. The essential position of the American public seems to be
that citizens favor war but would much prefer that military
action be internationally sanctioned. Now, polls are volatile: At
the beginning of a war, the numbers have historically shifted
toward overwhelming support for the president. For long years
during the Vietnam War, public opinion continued to support the
military action. Therefore, the Bush administration knows that
the poll numbers being seen now are sufficient to support a war.

However, two problems emerge. First, the political configuration
in Britain has deteriorated substantially over the last two
months, and Prime Minister Tony Blair is clearly signaling
intense political problems. Unlike other countries, Britain
provides substantial material support to the war effort, and loss
of that support would directly affect U.S. war-fighting
capabilities. The second problem is military: A quick U.S.
victory in Iraq would change the political equation domestically
and have a substantial effect globally, particularly if
casualties were minimal and occupation forces were to discover
stockpiles of weapons of mass destruction. However, there is no
way to guarantee any of these things. This war - like all wars -
potentially could be more difficult and costly than either side
expects or hopes.

Therefore, the United States must make a calculated risk. It is
possible that massive U.S. pressure might produce a shift within
the U.N. Security Council, but the basic configuration of global
opinion will remain intensely opposed to war. There is a high
probability of victory, but no commander can afford to begin a
war that he not only must win, but win quickly, cheaply and with
no nasty surprises. Therefore, the United States could find
itself in a more extended war than it seeks, with the
psychological pressure of global opposition reverberating through
the media. That is the last thing Washington wants.

It would seem to follow that the logical course for the United
States would be to find a basis for not going to war with Iraq.
Enough solutions are floating around in the world that Washington
could craft a suitably plausible justification for the decision
not to go to war, and perhaps even claim a victory of sorts.
Since the Bush administration appears to have lost the diplomatic
and psychological initiative gained after the Sept. 11 attacks,
this would seem the rational outcome.

In our view, this is not what the Bush administration is going to
do -- because it cannot afford to do so from either a strategic
or a political standpoint. There is no doubt within the Bush
administration that the protracted run-up to war has allowed
opposition to solidify, and that the international political
process leading up to war has become unmanageable. The decision
to use the threat of weapons of mass destruction, rather than the
deeper strategic issues we have been discussing to justify a war
has created unexpected problems. It was assumed that the presence
of WMD in Iraq would be generally recognized and regarded as a
problem that must be solved -- even if there was war. Instead, it
has turned the discussion of war into a detectives' game in which
some of the judges will not admit that a violation exists, even
when photos of a missile are distributed. At root, France, Russia
and the rest are not particularly concerned about Iraqi weapons
of mass destruction. They are deeply concerned, however, about
the strategic consequences of a U.S. victory in Iraq, which would
leave the United States the defining power in the region. These
countries oppose the strategic outcome of the war and are using
the publicly stated justification for military action -- WMD -- as
their reason to oppose war. Allowing the WMD issue to become the
touchstone was clearly a fundamental miscalculation by the
Washington.

Put another way, the opponents of war recognized the U.S. gambit
and, for reasons of grand strategy -- as well as some
idiosyncratic realities -- refuse to play.

Nevertheless, retreating from the commitment to war would
represent a serious challenge to the Bush administration in three
areas: strategy, psychological warfare and domestic politics. As
in a game of chess, many options appear to be available -- but
when the board is studied in detail, the constraints are much
more substantial and the options much more limited.

The strategic challenge is tremendous. After Sept. 11, the United
States did not have a war-fighting strategy. The strategy that
was first adopted -- a combination of defending the homeland and
attacking al Qaeda directly -- has proven difficult, if not
ineffective. Al Qaeda is a sparse, global network operating in a
target-rich environment. A defense of the homeland is simply
impractical; there are just too many potential targets and too
many ways to attack them. Attacking al Qaeda on an operative-by-
operative basis is possible but extremely inefficient. The
inability to capture -- or actually to locate -- Osama bin Laden
is emblematic of the challenges posed to the United States in any
dynamic, global conflict with a small, mobile group.

Washington's decision to redefine the conflict was driven by the
ineffectiveness of this response. The goal has been to compel
nations to crack down on citizens are enabling al Qaeda --
financially, through supplying infrastructure, intelligence and
so on. Many governments, like that of Saudi Arabia, had no
inclination to do so because the internal political consequences
were too dangerous and the threat from the United States too
distant and abstract. The U.S. strategy, therefore, was to
position itself in such a way that Washington could readjust
these calculations -- increasing cooperation and decreasing al
Qaeda's ability to operate.

Invading Iraq was a piece of this strategy. Iraq, the most
strategic country in the region, would provide a base of
operations from which to pressure countries like Syria, Iran and
Saudi Arabia. Iraq was a piece of the solution, but far from the
solution as a whole. Nevertheless, the conquest and occupation of
Iraq would be at once a critical stepping-stone, a campaign in a
much longer war and a proof of concept for dealing with al Qaeda.

If the United States does not invade Iraq, it will have to
generate a new war-fighting strategy against al Qaeda. The
problem for Washington is that it doesn't have another strategy,
except the homeland defense/global covert war strategy, which has
not proved clearly effective by itself since Sept. 11. If the
United States abandons the operation in Iraq, follow-on
operations against enabler of al Qaeda will be enormously more
difficult.

First, the key base of operations would not exist.

It should be noted here that the United States has deployed the
bulk of its mobile strike forces to the region. They cannot be
kept there indefinitely, due to threats elsewhere in the world.
Therefore, as they withdrew, profound political concerns would
emerge in countries such as Kuwait, Qatar, Bahrain and Oman,
which have taken political and strategic risks to align
themselves with the United States. As Washington withdraws its
forces and Saddam Hussein continues to dominate Iraq, the
willingness of other nations to stand with the United States will
decline. The effect on U.S. allies in the region who have agreed
to participate in the war against Iraq will be substantial and
will reverberate for an extended period of time.

This is the second point: Coalition warfare relies heavily on
perceptions of reliability. During the Cold War, this was called
"credibility." Credibility is a two-edged sword: It can create
coalitions, and it also can cause nations to do things they don't
want to do in order to retain their credibility. Credibility must
be managed, but it is indispensable. A precipitous capitulation
would damage credibility seriously.

This leads to the second dimension: psychology. The credibility
of the threat posed by the United States will decline
substantially if there is no war. The calculation within the
Islamic world of whether al Qaeda or the United States is more to
be feared will solidify rapidly: Al Qaeda is a real threat to
regimes in the region; the United States is not. If Washington
abandons its war plans and Hussein is left in place, the
perception of the Islamic world will be that the United States
had neither the will nor the power to destroy its enemy. One of
the arguments that al Qaeda has made consistently is that the
United States is weak and that its troops will not endure
hardship and danger. It is this argument that has made bin
Laden's recruitment effective.

If the United States abandons war under the current conditions,
Hussein not only would be perceived as victorious, but also seen
as victorious because of a bodyguard of great powers that protect
him. It would be argued that these great powers oppose the United
States just as much as the Islamic world did. The United States
would be seen as having been strategically paralyzed by a global
alliance.

Thus, at a time when the United States is trying to reverse the
perception within the Islamic world that it is a militarily
ineffective power, mobilizing forces, deploying them to the
region, threatening war and then refraining from action would
have the opposite effect. Moreover, at a time when the United
States is less dependent on allies for war-fighting than at other
points in its history, the perception that would result would be
exactly the opposite.

The net result would be increased credibility both for Hussein
and Islamic radicals, who might have very different ideologies
but share common interests. There have been those who have argued
that recruitment for radical Islamic groups would grow in the
event of war against Iraq. That might be true. However, one of
the major bars to recruitment has been a sense that the radical
cause is hopeless. A U.S. abandonment of war at this point would
increase hope and therefore increase both ferment and
recruitment. Things that have appeared impossible now would
appear manageable, and risks that wouldn't be taken before could
be taken now. An abandonment of war, in our view, actually would
increase the probability of strikes by Islamic militants against
U.S. interests over the long run.

Finally, there is a domestic political consideration. All U.S.
presidents take these considerations into account when mulling
whether to fight -- or not to fight -- wars. All presidents keep
their eyes on the polls when making their decisions on war and
peace, and George W. Bush is no different. Bush is almost exactly
one year away from the Republican primaries. He is facing a
Democratic Party that thus far is still sorting itself out from
its mid-term election losses and a quiescent Republic Party.

If the president abandons his plans on Iraq and the Hussein
regime survives intact, Bush would lose a good portion of his
party, of which about 83 percent support the war option. There is
not much anti-war sentiment among Republicans, and the anti-war
movement is not going to endorse Bush -- but rather would make the
argument that it blocked Bush from making war. The net result
would be a challenge to Bush within the Republican Party,
probably from Sen. John McCain (R-Ariz.), who simply would argue
that Bush is too indecisive to be president. Even if he turned
back the challenge from McCain -- or someone else -- Bush would
be badly weakened in 2004. He cannot afford to be weak after
after his marginal and disputed victory in 2000. Therefore, for
Bush, the domestic consequences of not going to war would be
devastating: His opponents would get the credit for stopping the
war and his supporters would feel betrayed.

Bush's problem is that, for nearly a year, he has been talking
about the importance of the Iraq issue. He has made it the
centerpiece of his public diplomacy and of his domestic political
base. Iraq also represents the only coherent strategy that has
emerged from a politico-military standpoint since Sept. 11. It is
not a great strategy against al Qaeda, but it is the only
coherent strategic option on the table -- aside from waiting and
hoping that the next attack is foiled. It does not have an
immediate application, but it has a long-term application. It is
the best hand Bush has in a series of pretty bad hands.

Therefore, it is extremely difficult to imagine Bush simply
abandoning his policy on Iraq, or adopting a transparent pretense
of having achieved his goals. There was certainly a time when he
could have chosen to abandon the Iraq issue; there also was a
time when he could have attacked with much less public outcry.
Those times are past. He cannot walk away now, and he cannot
attack without an international uproar. The logic of his
situation is that he will attack, endure the uproar and let what
he badly hopes is a quick victory carry him over the hurdle.

Bush may wish at this point that he had not embarked on his
campaign against Iraq. Alternatively, he might wish that he had
acted sooner. However, given his strategic premises, diplomatic
realities and political interests, we continue to believe that
Bush will order an invasion of Iraq -- regardless of the
evolution of diplomatic events -- and that this attack will come
sooner rather than later.




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GT

02/28/03 10:52 AM

#81427 RE: Zeev Hed #81322

The testimony of Sec. Rumsfeld before the Defense Subcommittee of Senate Appropriations Committee last year explains much of the recent stock price movement in the defense industry. Here is a link to the transcript for reading later http://www.defenselink.mil/speeches/2002/s20020521-secdef.html

In my view, there is no reason to read anything into the recent stock prices of the defense industry companies regarding future actions in Iraq.


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limtex

02/28/03 11:27 AM

#81460 RE: Zeev Hed #81322

Zeev - This looks very much like its going to get noisy sooner ratehr than later.

all the body language is that this is real.

Spring will arrive in the NE in march and after mr Hussein has found a new job the oil price will be a lot nearer to $20 than $40 by the end of March.

No-one should eveer predict wars since they are so serious but it does seem a little far fetched that the US/British armies will not deal with this matter in more than two weeks.

Of course there is a risk of civil war afterwards but this has to be dealt with now or it is going to get far worse.

L

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optionking

02/28/03 11:55 AM

#81468 RE: Zeev Hed #81322


ZEEV...ur points make sense. If Bush dont intend to go to war, then why mass 200,000 TROOPS. Dont they cost a bundle to maintain and feed. This time allies are not paying for their costs. Is the massing for some other reason or need? Lots of fishy stuff going on indeed.
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dave_s

02/28/03 12:56 PM

#81501 RE: Zeev Hed #81322

Zeev,

You may not have the causality quite right. An operational war the the US must fund almost always costs the services more than they get compensated by the DOD (20 to 30 % comes out of the services hide). The services have large fixed expenses. Thus, new procurements are slowed and non-obligated funds are swept back into the general pool to fund the actual conflict.

Given that the US will have to pick up a big share of the kitty fof this conflict, defense procurement may be ratcheted down for several years.

Regards,

Dave
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Rick Louden

02/28/03 11:53 PM

#81734 RE: Zeev Hed #81322

Zeev, this is the 21st response to your post. I wonder what the record is? (g).

but maybe the current high crude prices reflect Venezuela and the harsh winter.......Yes, there is little doubt (in my mind) that crude prices would be much lower if Iraq was the only issue.

Could it be that Bush does not intend to actually go to war and the whole "build up" is just a very aggressive way of showing Saddam what could happen if he does not comply?......Yes, otherwise why would the deployment have been "behind schedule" and not fully deployed a few weeks ago?Unfortunately, the world didn't back Bush, thus giving Saddam hope that he can hold off war by continuing to play games with the inspectors and the U.N. And unfortunately, the result of the world not being firm and tough may be that there will be war when otherwise it may have been avoided. Of course, even if the world backed Bush, Saddam may not have caved in. Anyway, I'm sure Bush hoped that the threat of war would solve the problem.....who wouldn't hope that the mission could be accomplished without war?? Now, Bush has to intimidate Saddam on his own without the support of many countries and most U.S. actors and actresses. Will he succeed or will we go to war?.....war is looking more likely every day I'm afraid.

All of the above just IMHO.

Tom

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SantaCruz

03/02/03 2:04 PM

#81891 RE: Zeev Hed #81322

IMHO we're going to war no matter what. Frankly I think it was planned well before 9/11. IMHO it has nothing to do with disarming. It has everything to do with removing Saddam from power. Personally I think Shrub would've been better off getting a law modified that allows the CIA to assasinate heads of states that illegally develop WMD or something like that. Instead he has chosen to enter into what most likely will be a very bloody war with significant loss of life on both sides.

It is however interesting that all of wall street seems to think that after the war starts, the market will be higher - thus the pre-war rallies where everyone is positioning themselves for the big postwar rally. Will they be surprised?