After the Surge, there is a sharp decline in the price of those bonds, relative to alternative bonds. The decline signaled a 40% increase in the market's expectation that Iraq will default. This finding suggests that to date the Surge is failing to pave the way toward a stable Iraq and may in fact be undermining it.
Who you going to believe? Hard nosed bond market investors? How about the rosier view of George W. Bush? Or how about the curious view of General Petraeus who mentioned "Al Qaeda" 160 times (according to Brian Williams) in recent Congressional testimony? Think about how dishonest (or self-deluded or not too bright?) the Bush Administration and at least one top US officer have gotten to try to argue for a continued US presence in Iraq due to an Al Qaeda threat. The foreign fighters who proclaim they are Al Qaeda forces (like replica watches using brand names), being Arab Sunnis, want the Arab Sunnis to regain power and see the Arab Shias as enemies. The Arab Shias are the clear majority of Iraqis and the Arab Sunnis are up against the Arab Shias and the Kurds. The Al Qaeda Sunni threat to continued Shia and Kurdish control is small. The Sunnis are getting steadily purged out of Baghdad, cementing Shia control of the "national" (using the term loosely here) government.
The bond market participants have serious money of their own at stake and do not need to defend Bush Administration mistakes. By contrast, George W. Bush and allies are spending OPM (Other People's Money) in an attempt to find some way out of Iraq short of admitting the invasion was flawed in its conception. He's telling tall tales to play for time hoping some good trend will develop. Don't trust him.
Update: A Zogby poll conducted August 11-20, 2007 found that a majority of Americans still think we haven't lost the war in Iraq.
A majority of Americans - 54% - believe the United States has not lost the war in Iraq, but there is dramatic disagreement on the question between Democrats and Republicans, a new UPI/Zogby Interactive poll shows. While two in three Democrats (66%) said the war effort has already failed, just 9% of Republicans say the same.
The problem with such a poll hinges on what is meant by the term "lost". US troops could stay in Iraq another decade and go any place in the country any time they want to if we keep enough troops there. So in that respect we haven't lost. But we can't win in the sense of creating a liberal democracy with freedom of religion and speech and with freedom for women. The Iraqis do not share our values and we can't convert them to our values. So in that sense we've lost.
|Share |||By Randall Parker at 2007 September 16 12:46 PM MidEast Iraq New Regime Failures|