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Iraqis Vote! Dow to 11,000!

Reported by Judy - December 17, 2005

Fox News may have given itself a hernia straining to make a connection between good news for the Bush Administration and an upward direction in the stock market when its "Bulls and Bears" panelists on Saturday (Dec. 17, 2005) debated whether the Iraqi election will be enough to push the Dow above 11,000.

Anyone who ever took a high school economics class has enough investor savvy to wonder why those two events would possibly be related. But "Bulls and Bears" host Brenda Buttner pushed on with the silly non sequitur anyway.

"Iraqi election -- huge success! Will this spark a huge rally on Wall Street?" Buttner asked to kick off the show, brimming with pleasure at the idea of Iraqi "democracy."

Turning first to Tobin Smith of Changewave Research, the panelist most ready to kiss the Bush administration's feet, Buttner asked if he thought the Dec. 15 Iraqi election would push the Dow above 11,000.

Smith did not disappoint Murdoch, I mean Buttner. "Yes, you know, this is great news. We're losing the war on Christmas, evidently, but we're winning the war (on Iraq)," he said. "The naysayers cannot disrespect the fact that there was a huge turnout, there was safety involved, we aren't killing people, and the fact that they are actually getting farther down the road. ... This is the one that says, forget you Howard Dean, forget you guys that are talking about pulling out. There's no pulling out." Scott Bleier, from hybridinvestors.com, said the elections were proof that "the end game in Iraq is in sight."

Gary B. Smith, from realmoney.com, said he agreed with Tobin Smioth, but still thinks the market will go down. "This would be a huge deal if people could remember what election we're on in Iraq," he said, "but it is kind of like 'inside baseball.' I think there's a lot of people out there, I'm guessing most of Wall Street, who said, 'Didn't we just have an election?'" Nevertheless, he said it was "great progress for the current administration." So without knowing whether the Iraqis were approving a constitution or electing a Parliament, Smith is ready to say the voting was "great progress." Hmmm.

Before you run out and invest your life's savings based on the recommendations of these scam artists, it might be good to find out what others are saying about the meaning of Thursday's Parliamentary elections. For one thing, no reliable results will be available for two weeks, according to the Iraqi government, so there's no way of knowing who might have won and whether they are friends of the U.S. or not.

Juan Cole, author of the Informed Comment Blog, wrote on December 15 that many Americans probably were thinking that the elections were a sign that U.S. troopos might soon be withdrawn. But, he said:

"I cannot imagine why anyone thinks that. The Iraqi 'government' is a failed state. Virtually no order it gives has any likelihood of being implemented. It has no army to speak of and cannot control the country. Its parliamentarians are attacked and sometimes killed with impunity. Its oil pipelines are routinely bombed, depriving it of desperately needed income. It faces a powerful guerrilla movement that is wholly uninterested in the results of elections and just wants to overthrow the new order. Elections are unlikely to change any of this."

Cole, who also is a professor of history at the University of Michigan and has testified before congressional committees on Iraqi policy, says the elections will only lead to a U.S. withdrawal if those who win seats in Parliament happen to be people who want to kick out the U.S. "Virtually all the Sunnis who come in will push for that result (which is why the US Right is silly to be all agog about Fallujans voting), and so with the members of the Sadr Movement, now a key component of the Shiite religious United Iraqi Alliance. That is, these elections lead to a US withdrawal on terms unfavorable to the Bush administration. Nor is there much hope that a parliament that kicked the US out could turn around and restore order in the country," he said.

If that's not enough cold water on the idea of Iraqi elections as swell news, Cole writes in his Dec. 17 entry that secular candidates like the current Prime Minister Iyad Allawi, probably did not do well in the election. The Shite religious coalition backed by Grand Ayatolla Sistani, on the other hand, may do very well, he said. Seems the Iraqi idea of democracy is more of a theocracy. No wonder the religious right thinks the elections are such a great deal.

Toward the end of the segment, Tobin Smith said he met with a Republican senator on Friday "and he talked about the fact that politically we have to pull troops out. Politically, the Republican Party has got to keep this momentum (Bush's popularity) coming back up. So I just think that, listen, what's good for the Republican Party is good for Wall Street right here." (Smith mangled the senator's name and I could not make it out.)

Whoever the senator was must have done a good sales job on Smith because on the Nov. 17 show, Smith had this to say about the possibility of taking troops out of Iraq: "The reality is, we made a five, ten-year commitment to this thing. We're in. Pulling out is preposterous. We have our brothers in arms, the Iraqis, if we pull out, I think that's just crap. It's not a laughing matter about the idea of pulling out and leaving people on the hook."

His comment then that taking out troops would lead to $85 or $90 a barrel prices for oil apparently no longer stands now that Republicans in the Senate have told Toby what their game plan is. It was "just crap" when Democrats talked about it, but now it's good for the stock market.

Seriously, would you take a stock tip from this guy?

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