Geopolitics

On the ground in Afghanistan the situation is better than the Pentagon lets on. They really learned their lesson in Vietnam and now under count enemy casualties and tell the American public things are going along somewhere between poorly and okay when in fact the progress is terrific. No, the Pentagon says, Progress is fragile, but there is progress, just barely. American military brass don't crow about victories or do high fives. That's smart, good management of public opinion.
Here are the facts on the ground. The Battle of Marja is over. The three step process is complete. Clear. Hold. Build. The Battle of Kandahar is half over and is predictably following the same victorious path carved by the earlier battle. Kandahar is larger than Marja and will take longer. In WW II there were many battles larger than Stalingrad and some of them took place after Stalingrad. Despite it not being the largest, Stalingrad was the turning point of WW II. And so it is with Marja. The Marines have a formula for winning.
And of course that formula, known as COIN, also has a successful track record in Iraq. The IMF forecast Iraq's GDP will grow by 11% in 2011. This might be the highest GDP growth of any country on Earth. Small wonder, the US Army left Iraq with a free market economy similar to Singapore's. Too bad the US Army doesn't design the US economy. In any case, over the next few years Iraq is going to take oil production from 2 million barells a day to 13 million, thereby saving the planet from a double-dip recession.
There are stock market implications in all this. Consider Ferro Corp (FOE). It just bought a tile factory in Egypt to go after the building booms in North Africa and the Mideast. High end homes in Somalia have loads of ceramic tile in them. And lots of luxury homes are getting built outside Mogadishu and in Southern Iraq.