Iraq: Signals of slow but sure Lebanonization
As I have been sitting down arguing over the investment memo on the steel facility, it's becoming ever more clear to me that we have an issue far more serious than simply investment structure, for all my whinging about that.

Are real issue is, even with USG risk insurance, who will want to touch Iraq given any intelligent observor can see the country is slowly, but surely sliding towards Lebanonization circa 1975. That means a slow, but sure slide into communitarian violence. Pauses will occur, there will be hope in regards to pulling out, but inexorably the hard core factions in each (major) community will see greater benefit in trying to grab power rather than share it. The logic is there, the ingredients are there, and I see absolutely no real countervailing measures to prevent this slide. Except perhaps an international peace keeping force, although that is not going to happen, and in reality I suspect the factions are too heavily armed to be able to successfully be suppressed (except by massive and bloody force that is unacceptable to all in that context).

Excellent. Now, that does not mean you can't still make money out of Iraq, but it sure does mean you have to think about where the enclaves are likely to be, and where the "green lines" are likely to be. Central region is likely to be a fucking mess. North West of Baghdad a Sunni controlled zone, North east perhaps neutralish, Kurdish region, long line of skirmishing, with Kirkuk a mini Baghdad cauldron of violence, south of Baghdad, another skirmish zone. Baghdad, the heart of darkness.

For my money, I bet Basra may emerge as another economic center over the next decade.

I may be too pessimistic at present, but that's my present call.