INTERVIEW-Stratfor advises investors Iraq war may take time

Reuters via Forbes.com ^ | 3-25-03 | By Per Jebsen

[Oldeconomybuyer]

NEW YORK, March 25 (Reuters) - Even as U.S. armored columns close in on Baghdad, the head of a leading private intelligence company has warned Wall Street investors not to assume the conflict in Iraq is nearly over.

"This is going to be much tougher than people thought," said George Friedman, chairman and founder of Stratfor, which advises clients on geopolitics. "We're looking at a war that will last from several weeks to several months, that will have some serious casualties on both sides, but will ultimately result in American victory."

Friedman and his 45-person outfit based in Austin, Texas, deliver analyses that blend military, political, and economic factors to clients. Every trading day, before markets open in New York, Friedman provides 15-minute telephone conference briefings on war news and its likely impact. He gives briefings throughout the day.

In his Tuesday pre-market briefing, Friedman predicted Wall Street's "temper tantrum" hopefully had exhausted itself, and that investors would now "deal with reality." A day earlier, after a weekend of apparent setbacks for coalition forces, Friedman had warned investors to expect Monday to be a "very, very bad" day for markets, saying "fantasies" of immediate Iraqi capitulation were over.

The Standard & Poor's 500 Index <.SPX> fell 3.5 percent on Monday, and has risen about 1.7 percent on Tuesday.

Friedman said he founded Stratfor, or Strategic Forecasting LLC, in 1996 after he realized that the "private sector needed an intelligence service." He told Reuters in an interview that demand for Stratfor's services has mushroomed since the terror attacks of Sept. 11 and especially since the outbreak of war.

"At this moment, gyrations of the stock market predominate," Friedman said. "These people (who) trade commodities are used to looking at meteorological reports. Now they have to study the deployment of armored battalions."

"What we supply in this particular case is an integrated knowledge of warfare and stock markets," he said.

REAL LIFE

Wall Street is obsessed with an overarching question -- 'How long will it take?' -- Friedman said. Stratfor seeks to provide a geopolitical and historical perspective that investors who came of age during the "peculiar period" of the 1990s may lack, he said.

"From our point of view, the 1990s were a freak, this is real life," Friedman said, explaining that after the Cold War ended, there was a widespread assumption the traditional rules had changed, that "geopolitics don't matter ... this world doesn't have borders anymore."

Historical savvy helps disabuse investors of the notion that the United States can expect a rapid, 48- to 72-hour triumph, he said. During the first Gulf War, U.S.-led forces took six weeks to eject Iraqi forces from the "tiny" country of Kuwait, even though allied forces were twice as large then as they are now, Friedman said. Investors also tend to forget that the bombing campaign that caused the Serbian military to leave Kosovo lasted two months, he said.

"In 1973, people would track Israeli troop movements," Friedman said. "(Now there is) a generation that missed a dimension of reality, and this generation is now playing catch-up, and in playing this catch-up, it's sometimes painful for them," he said.

The company operates a subscription-based Web site, (http://www.stratfor.com), that provides analyses on topics ranging from potential conflict in Nigeria to challenges to reform in Iran, as well as the war in Iraq. Clients include Fortune 500 companies and major government agencies, according to the Web site.

In addition to its 45 full-time employees, Stratfor has several hundred sources -- referred to as "agents" -- around the world who supply information from the field, Friedman said.

[EaglesUpForever]

A Stratfor press release, devoid of new info... Isn't Statfor like one or two people? Seems like a very amateur operation.

[Maedhros]

You have no chance to survive make your time.

[HarryKnutszacke]

The Stratfor stuff always sounds like the guy is on the inside, and knows just what's what. --and I've been reading them since 1998 or so.
However, I distinctly remember right after the 9/11 attacks he talked about how the planes could not have brought down the towers by themselves, and how thus the buildings must have been wired with explosives, and thus . . . you get the picture.
EVERYTHING must be taken with a grain of salt.
Even this post.

[Ernest_at_the_Beach]

The exec's pay for this opinion?

OFFICIAL BUMP(TOPIC)LIST

[ambrose]

I would give Statfor's opinions about as much weight as I would give DEBKA's...

[HarryKnutszacke]

I was starting to doubt myself. I had to look at archive.org for the stratfor post-9/11 attack comment. It is here.

[Fulbright]

Time, i.e. we need to get about 400,000 troops, rather than 250,000, in theater in order to keep order, which anybody with half a brain knew.