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To: RealMuLan who wrote (61197)12/29/2006 12:20:35 PM
From: regli  Respond to of 116555
 
Sectarian Ties Weaken Duty’s Call for Iraq Forces

nytimes.com

December 28, 2006

By MARC SANTORA

BAGHDAD, Dec. 27 — The car parked outside was almost certainly a tool of the Sunni insurgency. It was pocked with bullet holes and bore fake license plates. The trunk had cases of unused sniper bullets and a notice to a Shiite family telling them to abandon their home.

“Otherwise, your rotten heads will be cut off,” the note read.

The soldiers who came upon the car in a Sunni neighborhood in Baghdad were part of a joint American and Iraqi patrol, and the Americans were ready to take action. The Iraqi commander, however, taking orders by cellphone from the office of a top Sunni politician, said to back off: the car’s owner was known and protected at a high level.

For Maj. William Voorhies, the American commander of the military training unit at the scene, the moment encapsulated his increasingly frustrating task — trying to build up Iraqi security forces who themselves are being used as proxies in a spreading sectarian war. This time, it was a Sunni politician — Vice Prime Minister Salam al-Zubaie — but the more powerful Shiites interfered even more often.

“I have come to the conclusion that this is no longer America’s war in Iraq, but the Iraqi civil war where America is fighting,” Major Voorhies said.

A two-day reporting trip accompanying Major Voorhies’s unit and combat troops seemed to back his statement, as did other commanding officers expressing similar frustration.

“I have personally witnessed about a half-dozen of these incidents of what I would call political pressure, where a minister or someone from a minister’s office contacts one of these Iraqi commanders,” said Lt. Col. Steven Miska, the deputy commander for the Dagger Brigade Combat Team, First Infantry Division, who oversees combat operations in a wide swath of western Baghdad.

“These politicians are connected with either the militias or Sunni insurgents.”

Whatever plan the Bush administration unveils — a large force increase, a withdrawal or something in between — this country’s security is going to be left in the hands of Iraqi forces. Those forces, already struggling with corruption and infiltration, have shown little willingness to stand up to political pressure, especially when the Americans are not there to support them. That suggests, the commanders say, that if the Americans leave soon, violence will redouble. And that makes their mission, Major Voorhies and Colonel Miska say, more important than ever.

They added that while political pressure on the Iraqi Army is great, the influence exerted on the police force, which is much more heavily infiltrated by Shiite militia groups, is even greater.

Shiites, led by militia forces and often aided by the local police, are clearly ascendant, Colonel Miska said.

“It seems very controlled and deliberate and concentrated on expanding the area they control,” he said.

The Sunni forces are being bolstered by support from insurgent strongholds in the West. The Shiite militias are using neighborhoods in the north, specifically Shuala and Sadr City, as bases of operation. There is also increasing evidence that militia members from southern cities like Basra are coming to Baghdad to join the fight.

“I believe everyone, to some extent, is influenced by the militias,” Colonel Miska said. “While some Iraqi security forces may be complicit with the militias, others fear for their families when confronting the militia, and that is the more pervasive threat.”

Looking at a map he had his intelligence officers create, which highlights current battle zones and details the changing religious makeup of neighborhoods, Colonel Miska noted just how many different forces, each answering to different bosses, currently occupied the battlefield.

“Who would design this mess?” he said. “It is like an orchestra where everyone is playing a different song.”

His main focus, he said, is trying to establish some kind of unity of command.

As it stands, the police and military answer to different ministries, and within the police force the bureaucracy is divided even further between the regular police and the national police. On top of that are about 145,000 armed men who work as protection detail for the Facilities Protection Services, with minimal oversight, according to United States military officials.

There are also thousands of Shiite militia members and Sunni insurgents posing as security forces.

Colonel Miska tried to define where American forces fit in the tangle of competing interests, which is only further complicated by the complicity and direct participation of top government officials.

“When they are conducting armed aggression against the population, that is where we try and step in and stop it,” he said, adding that when the groups fight one another, “We sit back and watch because that can only benefit us.”

Some days, the line between militia and insurgent clashes and attacks on the population is a blurry one.

Nowhere can the current battle be seen more starkly than on the border between the Shiite district of Shuala and the Sunni controlled Ghazaliya.

Major Voorhies briefed his men before dawn last Thursday morning about the day’s mission, code-named Operation Thunderball. They were to join with Lt. Col. Sabah Kadam Fadily and his command unit and direct a joint search of houses in Ghazaliya. There were 300 American troops and 200 Iraqis involved in the operation.

The sun was just rising as the team set out, and daylight revealed an apocalyptic landscape, trash everywhere, open sewers emitting a revolting smell and scores of buildings damaged in recent clashes. A mosque on the side of the road had a massive hole blown in its once ornate blue dome.

Major Voorhies got a call on his radio. The Iraqi soldiers had spotted a body.

It was a man, dead, tossed on the side of the road, piled with the garbage. His hands were bound behind his back and his shoes were off. His head was turned to the right, revealing a single bullet hole covered in blood that still appeared wet.

As the Iraqi soldiers called the police, who pick up dozens of similarly abused bodies around the city daily, an American soldier spotted a pair of legs. Major Voorhies walked over and, with a stick, flipped a piece of plastic foam off the body.

It was another man, his neck slit, his head almost completely severed. He was lying on his back, eyes open looking vacantly to nowhere, arms bound behind him and torn from their sockets.

Major Voorhies asked Colonel Sabah if he could tell if the man was Shiite or Sunni, but the answer was obvious to the colonel.

“He is Shiite,” Colonel Sabah said absently.

“How do you know?” asked the American major.

“Because this is the Sunni sector,” Colonel Sabah said.

There would be little investigation and no chance that anyone would ever be arrested for the murders, Major Voorhies said. In fact, he said, Colonel Sabah’s assessment might not even be right since the Sunnis and the Mahdi militia, called JAM for Jaish al-Mahdi by American troops, had been fighting for control of this forlorn ground.

“This is either a warning from the Sunni here” to the Shiites to get out, he said. “Or a message sent by JAM that we are winning.”

For the American soldiers, it was just another morning in Baghdad, where Americans are trying to protect people on both sides while being attacked by people on both sides, trying not to take a side themselves.

Major Voorhies thought about what he had just seen and the cycle of killing it would inspire.

“I don’t know what the answer is,” he said, almost to himself.

But he said he would push forward with his mission regardless.

Last week, a search of a house led to the discovery of 23 men being held captive, likely to be killed. He could take pride in helping save their lives, even if some of them might be shooting at him tomorrow.

Colonel Sabah, in glaring contrast to his efficient and focused American partners, did not seem to display a sense of urgency. He paid a visit to a house that belonged to a former Army colleague, a general, who had to flee the area. There he drank tea.

Then he went to see another past colleague, an admiral, and drank more tea. The two discussed what fun they had getting drunk and going to brothels.

Major Voorhies struggled to keep his patience.

“Sometimes I feel like I work for the Iraqi government,” he said.

Outside, neighbors gathered, telling strikingly similar accounts of having their lives threatened by Shiite militiamen, who forced them from their homes. They were angry about the searches.

“Anyone leaving Ghazaliya will get killed because they know you are Sunni,” said Fadhel A. Zaidan, who had lived in nearby Huriya for 50 years. “Now the Americans are taking our weapons, and when they leave, the Mahdi militia will attack.”

American commanders say they are aware of this danger. In part, that is why residents are allowed one AK-47 and two cartridges.

Among Sunnis, there is absolutely no faith in the ability, or desire, of the Iraqi Army or police to provide protection. Colonel Sabah, who is Shiite but who had to leave his own home because of threats by the militia, is viewed as a collaborator.

Major Voorhies acknowledged that it was easier to persuade Colonel Sabah to search Sunni neighborhoods. Still, he said the colonel was one of Iraq’s better army officers.

“When we have his back, he will fight anyone,” said Major Voorhies. “When we don’t, he will cut deals.”

American soldiers seemed to appreciate the difficult position of officers like Colonel Sabah. His brother was murdered on Sept. 12, and just working in the Iraqi Army puts his life in danger.

Facing such stark challenges already, it makes the actions of Iraqi political leaders who try to manipulate the security forces that much more galling, Major Voorhies said.

“Colonel Sabah gets in a very political predicament sometimes,” Major Voorhies said. “He will detain someone and then gets a call and is told not to take them away, so he has no choice.”



To: RealMuLan who wrote (61197)12/29/2006 12:22:33 PM
From: RealMuLan  Read Replies (1) | Respond to of 116555
 
U.S.: Why The Market Isn't Listening To The Fed
businessweek.com

It's ignoring inflation warnings, but bets on lower rates may be too optimistic

Wall Street and the Federal Reserve seem to have quite different views of the economy in 2007. Fed policymakers continue to send out warnings on inflation and the possibility of more hikes in interest rates. Market players aren't listening. They're not worried about inflation, and they expect the Fed to begin cutting rates at some point in the coming months. Meanwhile, investors are sitting back and enjoying the rallies that began in stocks and bonds last summer. Does Wall Street have it right?

So far, the chances look good, but both investors and the economy have a lot riding on the bet. If inflation is not as tame as the markets expect, and the Fed resumes its rate-hiking, bond yields and associated long-term rates for mortgages and corporate borrowing would climb. Higher borrowing costs would worsen the housing downturn and crimp corporate expansion. Plus, any market retrenchment would cut further into household net worth at a time when stock market gains have been a buffer against the waning support home values have offered to household wealth and consumer spending.

All this puts inflation smack in the middle of the outlook for the coming year, just when inflation prospects are especially unclear. Global competition remains an enormous restraint on U.S. prices, but the renewed decline in the dollar is likely to put some upward pressure on import prices. Oil and energy prices are creeping back up, but their future direction is still up in the air.

Plus, economists both inside and outside the Fed are unsure just how fast the economy can grow without fueling higher prices. Productivity gains, which helped keep a lid on inflation in recent years, have slowed sharply, and efficiency gains are offering less of an offset to rising labor costs, which could spur price hikes.

SO IS THE OUTLOOK for inflation really more worrisome than recent market trends suggest, or is the Fed just blowing smoke in an effort to protect its inflation-fighting credibility? The latest news from the prices indexes and from data on economic growth are coming in on the side of Wall Street. However, while there is mounting evidence that additional rate increases will not be needed, there is still little indication the economy has slowed enough to warrant rate cuts.

Both major gauges of consumer prices in November took a turn for the better after their upward trends through most of 2006. The overall consumer price index (CPI) and the Fed's preferred measure, the price index for personal consumption expenditures (PCE), each posted no gain from October, but the core indexes, which exclude energy and food, are what got the markets' attention, since the Fed tends to watch those closely. Both core indexes also held steady from October, and the annual trends of both are now headed down.

THE YEARLY INFLATION RATE for the core CPI appears to have peaked in September, at 2.9%, and it has since slid to 2.6% in November. The November softness vs. October was broad, although some price weakness, such as the declines in medical-care commodities and used cars, are unlikely to be repeated. Perhaps most significant, core service inflation, which makes up more than 70% of the core CPI, has edged down from a peak of 3.9% in September, to 3.7% in November. That's significant, since service prices tend to have a large labor-cost component, and they are more sensitive to domestic conditions and less so to global competition.


Inflation Pressures May Have PeakedThe decline in core CPI inflation is also impressive given that it has come even as rents and the CPI's rent-based measure of housing costs continue to rise at an accelerated pace. The government measures housing costs based on equivalent rental values, which have been rising as higher home prices have made homes less affordable and rentals more attractive. This pattern has had the perverse effect of pushing up housing costs in the CPI, which account for a big chunk of the total index. In coming months, as home demand firms up, this component of the CPI will begin to slow, placing additional downward pressure on the index.

What's especially encouraging in the outlook for Fed policy and interest rates is the recent behavior of the core PCE price index, the measure favored by the Fed. In November, yearly inflation by this gauge continued to run above the Fed's unofficial 2% limit, but the steady runup in 2006 may well have peaked at 2.4% last summer. The rate dipped to 2.2% in November, marking the largest decline from the prior month since the first half of 2003. The pattern in recent months is even more favorable. Measured at a comparable annual rate, the rise in the core PCE index over the past six months is near the Fed's 2% limit, and the annual rate over the past three months, at 1.8%, is running safely under that limit.

THE INFLATION OUTLOOK and any future Fed action will come down to the strength or weakness of the economy. Given the recent favorable shift in the price indexes, the economic slowdown that began in the second quarter appears to be creating enough slack in the economy to allow pricing pressure to abate. Economic growth slowed to a revised 2% annual rate in the third quarter, after posting a modest 2.6% advance in the second quarter, and the housing downturn and cutbacks in orders and output needed to pare down excessive inventories are keeping a lid on growth.

Price discounting will help to cut those inventories, and other efforts to reduce stockpiles are reflected in softer factory activity. Orders taken by manufacturers of durable goods have slowed sharply in recent months, and excluding the ups and downs in the volatile transportation sector, orders in the fourth quarter are set to decline for the first time in 3 1/2 years. Manufacturing output is following that same track.

Builders Show Some Hope For The FutureThe economy is far from weak, however. Look at the government's numbers on consumer spending. After adjusting for inflation, outlays posted month-to-month increases of 0.5% in both October and November. Those were the strongest back-to-back gains since the middle of 2005. Even if December buying shows no advance from November, spending still will have grown at a 4% annual rate from the third quarter, after only a 2.8% rise in the third quarter. That pickup will be enough to make a sizable contribution to overall growth, while helping businesses to unload some inventory.


Also, while more drag from the housing slump is on its way, the news on home demand is looking better. Sales of new single-family homes rose in November, reducing the inventory of unsold homes to a 6.3 month-supply, the fourth monthly decline in a row. And in December, builders' expectations of sales over the next six months continued to rise.

Heading into 2007, both inflation and economic growth are behaving pretty much as the Fed would like. If those trends continue, which looks likely, then investors stand a good chance of adding to their 2006 gains without fear that the Fed will spoil the party.