BAGHDAD — Bas­sam Talal, a wisp of a man with large ears and dole­ful eyes, is in his ele­ment on the floor of the “Iraq Stock Market”:http://www.isx-iq.net/. Every Mon­day and Wednes­day morn­ing, he pirou­ettes between the other 50 or so bro­kers, nip­ping up to the white boards that line the wall of the trad­ing pit. He marks 10,000 shares of Bagh­dad Car­bon­ated Drinks bought for 2 dinars a share (a $13 trade), 5,000 shares of al-Hillal Water Com­pany sold for 2.05 dinar a share (less than $7). He waves col­ored order slips above his head and darts between the white boards and the investors, sep­a­rated from the pit by a waist-high bar­rier. About 200 indi­vid­ual investors eye the Ara­bic scrib­bles of the orders on the wall. Some bring opera glasses. They’re mostly older, heavy­set men in suits, with a few tra­di­tion­ally dressed Bedouin guys hang­ing around. When the see a price they like, they ges­ture to Talal or another bro­ker and point.

All invest­ment comes with risk, but Iraq’s investors face spe­cial — and dead­lier — risks. Bagh­dad is the prize in a civil war that rages even as the Iraq Stock Mar­ket attempts to rebuild itself and Iraq’s shat­tered econ­omy. The fight­ing that often rages out­side the old hotel which houses the bourse is marked by vio­lence that is indis­crim­i­nate and sav­age. In Bagh­dad, car bombs, eth­nic cleans­ing and mas­sacres are the hall­marks of this fight. Located in Hayy al-Awaya, a Chris­t­ian neigh­bor­hood, mas­sive con­crete bar­ri­ers sur­round the entrance to deter car bombs, and grim gun­men care­fully search any­one who gets close.

“Dur­ing the ses­sion, I have about 15 min­utes of watch­ing the prices,” says Taha Ahmed Abdul Salam, the pres­i­dent of the Exchange. “The rest of the time I will be in the street watch­ing my guards who are watch­ing the build­ings. And I have some infor­ma­tion from the police. When I hear some­thing bad, believe me, I will go and search around the build­ing myself.”

He’s con­stantly engaged in a jug­gle of secu­rity and busi­ness. His refusal to halt trad­ing for any­thing is a point of pride for him, a show of defi­ance. On Feb. 22, the day the “Askariya shrine in Samarra was destroyed”:http://www.back-to-iraq.com/archives/2006/02/game_on.php, touch­ing off Iraq’s lat­est round of vio­lence that has yet to sub­side, “I didn’t stop the trad­ing,” he says. “I let the trad­ing go on, and I didn’t men­tion any­thing to anybody.”

The story of the Iraq Stock Exchange has as many ups and downs as a penny stock. It opened in 1992, but Saddam’s gov­ern­ment heav­ily reg­u­lated and manip­u­lated it, and often used it for money laun­der­ing. Prices were only allowed to move 5 per­cent in either direc­tion. By the time U.S. troops bore down on Bagh­dad in April 2003, about 140 com­pa­nies were trad­ing on it and its clien­tele was com­posed of busi­ness­men and wealthy Ba’athists who had socked some cash away. The Amer­i­cans closed the old mar­ket but re-opened it in June 2004 under Coali­tion Pro­vi­sional Author­ity Order No. 74. The new mar­ket has just 15 com­pa­nies, many of the old bro­kers and traded about 500 mil­lion Iraqi dinars a day back then — about $333,000.

Today — from a busi­ness point of view — things aren’t much bet­ter. Though there are 94 com­pa­nies listed, the mar­ket sees only about $1 mil­lion in busi­ness each ses­sion, Salam says. Bank­ing is the largest and most active sec­tor, because they have hold­ings of hard cur­rency and have formed part­ner­ships with for­eign banks like HSBC.

The high-point of the mar­ket, accord­ing to data pro­vided by the eco­nomic sec­tion of the embassy, was around the end of Octo­ber, when the per­ma­nent con­sti­tu­tion was approved. Total mar­ket cap­i­tal­iza­tion surged to almost $2.5 bil­lion, but it’s since plum­meted to $1.25 bil­lion as the polit­i­cal process drags on with no end in sight. (Iraq’s mar­ket is the small­est in the region, with even the Pales­tin­ian stock mar­ket dwarf­ing it at $25 bil­lion — and they don’t even have a real state yet.)

Although it’s legal for for­eign investors to own up to 49 per­cent of an Iraqi com­pany, it’s not yet been imple­mented because of tech­ni­cal hur­dles, which means the flood of for­eign invest­ment pre­dicted when the mar­ket reopened hasn’t hap­pened yet. What local invest­ment there is also side­lined because of a steady exo­dus of wealthy Iraqis and their money to neigh­bor­ing coun­tries dri­ves a vicious cycle of vio­lence, inse­cu­rity and poor eco­nomic per­for­mance that might lessen the violence.

“Peo­ple are wor­ried about their money,” says Talal in a break from trad­ing. “The price drops con­tinue, so peo­ple are try­ing to sell as fast as they can so they don’t lose a lot.”

There is a notional reg­u­la­tory regime with the Iraqi Secu­ri­ties Com­mis­sion, but there Salam and the bro­kers, who own the mar­ket, do the real reg­u­la­tion. They all know one another from the old Saddam-era exchange, which helps pre­vent insur­gents or crim­i­nals from gam­ing the mar­ket. Such famil­iar­ity feels good to Iraqis, but it seems sketchy to west­ern­ers used to more trans­par­ent, rules-based trad­ing rather than a sys­tem run by a bunch of buddies.

But if you talk to June Reed, a senior con­sul­tant for pri­vate sec­tor devel­op­ment at the embassy, things are going pretty well. “This mar­ket has func­tioned very well through sev­eral interim gov­ern­ments,” she said. “Make no mis­take: There is invest­ment in Iraq.”

Reed, a for­mer invest­ment banker from New York for Mer­rill Lynch and Credit Suisse, refused to budged off her cau­tious opti­mism about the mar­ket, stress­ing that great things were in store for the Iraq Stock Mar­ket when a per­ma­nent gov­ern­ment is in place and a planned automa­tion pro­gram is estab­lished. “Here it is truly the poten­tial that is the most impor­tant thing,” she says. But given the archaic, anar­chic and opaque nature of the mar­ket (“It was unusual to see grease boards, hand­writ­ing, etc.,” Reed says) any for­eign investors are rightly wor­ried that they could lose their shirts before they ever know what happened.

In the com­ing weeks, she says, that’s going to change, thanks to a pro­posed auto­mated sys­tem for trad­ing secu­ri­ties that will cre­ate a cen­tral, net­worked elec­tronic depos­i­tory, due to be com­pleted by the end of the year. There will be auto­mated sales, clear­ing and depos­i­tory func­tions like the NASDAQ, she says. “It’s very high tech.” Bro­kers like Talal will be able to respond to orders from his desk at his firm, the Nin­eveh Bro­ker­age, rather than nav­i­gate the IED-peppered streets of Bagh­dad. There are even plans for trad­ing over the Internet.

But as the Amer­i­can mil­i­tary has learned, whiz-bang tech­nol­ogy alone won’t make peo­ple feel safe enough to invest big money into a place like Iraq. The lack of polit­i­cal sta­bil­ity leads to a secu­rity vac­uum, which leads to car bombs, which leads to fur­ther cap­i­tal flight. “The sit­u­a­tion right now in Iraq is not sta­ble. There are many chal­lenges for the stock exchange,” says Salam gloomily. “The investors are all wait­ing for things to hap­pen to the econ­omy, the ser­vices. I believe every­one here is wait­ing for good things to happen.”

[Ed. note: I wrote this for “Fast Company”:http://fastcompany.com/homepage/index.html after I left Bagh­dad, but it was killed because I had the bad luck of fil­ing it the day before the NYT story ran. Such is the jour­nal­ism biz. But bet­ter to blog than to never been seen at all!]

CAMP DELTA, al-Karma, Iraq — Must make this one short and sweet, as I’m run­ning of of bat­tery on my lap­top, but since Thurs­day evening, I’ve been embed­ded with the 2^nd Bat­tal­ion, 2^nd Marines of the II Marine Expe­di­tionary Force sur­round­ing the gar­risoned town of Fal­lu­jah. I’ve not yet had a chance to get into the city proper yet, as the 2 – 2 doesn’t oper­ate there (that’s the 2 – 6 and 2 – 7’s area of oper­a­tions) but al-Karmah is an inter­est­ing lit­tle town.
It’s just to the north of Fal­lu­jah and Camp Delta, home of Fox Com­pany, is nes­tled in between Fal­lu­jah and al-Karmah next to the old Oil-for-Food ware­house. (It’s now an alleged stag­ing area for the insur­gents in the area who reg­u­larly poke their heads up and take pot­shots at the Fox Com­pany.)
I just want to share some notes and obser­va­tions I’ve made over the last two days.
*Fri­day, Octo­ber 28, 2005*
For the short drive to Camp Delta just across a half-hearted stream from the town of al-Karma, the Marines of Fox Com­pany ride only at night. They do this to min­i­mize the IED threat, says Capt. Mike Estes, the com­pany com­man­der, which is still ever-present almost a year after U.S. troops attacked the rebel strong­hold of Fal­lu­jah and its sur­round­ing towns, such as al-Karmah. Dust and grit pep­per the googles of Fox Com­pany, because they ride in high-backed, up-armored lor­ries instead of humvees.
Ear­lier, Capt. Chad Wal­ton, a spokesman for the 2^nd Marines at Camp Fal­lu­jah to the south, said that Fal­lu­jah was closed to the out­side world, with only res­i­dents allowed in after show­ing ID cards that proved their address. The Marines man five entry check­points to the city, turn­ing away any­one who can’t pro­vide the proper cre­den­tials or who­ever they deem sus­pi­cious.
“Obvi­ously, it’s not fool­proof,” says Wal­ton. “But it’s way bet­ter than it was.“
The Marines of Fox Com­pany agree; they talk of dri­ving through the old city with­out hav­ing a shot fired at them. But Fal­lu­jah is thor­oughly occu­pied. Iraqi police and Army take sec­ond stage to the Amer­i­cans, who aren’t shy about show­ing their pres­ence, in con­trast to Bagh­dad where U.S. patrols are almost scarce these days until you get near major instal­la­tions such as the air­port or the Green Zone. The Iraqis aren’t pre­pared to take over secu­rity oper­a­tions yet, and it will likely be years before they can. Is a thor­ough occu­pa­tion what it’s going to take to pacify the restive cities of the Sunni heart­land?
*Sat­ur­day, Octo­ber 29, 2005*
It’s still dark when the Marines of 3^rd pla­toon, Fox Com­pany starts out. The idea is to get a jump on their quarry, the leader of a mor­tar team that has been pep­per­ing Fox Company’s base, Camp Delta just south of al-Karmah. The air is cool on the skin and the sun bright­ens the sky from the direc­tion of Bagh­dad. Ahead, date palms are black against the indigo sky, and lush green­ery of reeds, cot­ton­tails, rice, dates and olive trees line the dirt roads.
3^rd Pla­toon takes it easy. The com­man­der, Lt. Anthony Carter of Endi­colt, N.Y., doesn’t believe in the brute force method of cordon-and-knock. It’s eas­ier — and more — effec­tive to take a more dis­creet and polite approach, he says. Whereas the U.S. Army excels are roar­ing up in humvees, sol­diers pil­ing out and putting on a show of force, Carter’s Marines instead walk up to the house where they believe Ali Muham­mad Saed, the mor­tar team leader, is liv­ing.
They’re in luck. He’s out front fid­dling with his orange-and-white taxi. He doesn’t seem sur­prised to see him and sits qui­etly while Carter orders all other military-age men in the imme­di­ate neigh­bor­hood to be rounded up and brought to Saed’s house. Soon enough, three men and two boys are brought over and they all squat on the porch of the house. It’s pos­si­bly the most peace­ful and respect­ful raid in Iraq’s his­tory.
“The days of just run­ning in the house are over,” Carter says. “If you flash-bang every house, you’re not mak­ing many friends.“
Saed’s cap­ture is a lucky break, and maybe it will help. Because these days, Fox Com­pany has been catch­ing hell from insur­gents who have been pushed out of the city of Fal­lu­jah and into the sur­round­ing coun­try­side since U.S. forces wrested the city from insur­gent con­trol last Novem­ber. While direct engage­ments are rare — the Marines always win and the insur­gents know it — IEDs and sui­cide car bombs are tak­ing a toll on Fox Com­pany. Since their deploy­ment in July, the 2 – 2 has had 12 Marines killed. Fox com­pany has nine guys out wounded and Carter’s 3^rd Pla­toon has had 6 pur­ple hearts awarded — out of a force of 37 guys. Only one of 3^rd Platoon’s awards came from being shot. The rest have come from IEDs and car bombs. So numer­ous are incom­ing mor­tar attacks on Camp Delta that body armor and hel­mets are required any­time a Marine goes out­side a build­ing.
“It’s not more vio­lent,” says Lance Cpl. Thomas Cum­mings, 21, of Hori­con, Wisc. “But what is vio­lent is more intense.“
This wasn’t sup­posed to hap­pen. As the polit­i­cal process moved for­ward, embassy offi­cials said all year, the vio­lence should decrease. There would be a cou­pling in increased Sunni par­tic­i­pa­tion and a decrease in vio­lence. But most of the injuries that have befallen 3^rd Pla­toon, says Lt. Carter, have occurred since the Oct. 15 ref­er­en­dum.
Just two hours later, the nearby boom of an IED fol­lowed by the rat­tling of gun­fire were a late coda his remarks. An ambush, some­where. Some­one else was catch­ing it today.

_(Note: This is the dis­patch I planned to file from my last embed in Ramadi back in May. For a vari­ety of rea­sons it never made it into TIME, but I thought you guys might like to see it. This was a typ­i­cal day on a week-long embed at the end of May.)_
RAMADI — Signs warn­ing “Com­pla­cency kills” dot the bases of the 1^st Bat­tal­ion, 5^th Marine Reg­i­ment in Ramadi.
The Marines sta­tioned in this provin­cial cap­i­tal in the treach­er­ous Sunni tri­an­gle are bored. Bored of patrols, tired of man­ning out­posts and frus­trated by an enemy they can’t meet face-to-face. The signs attest to the tedium of their days.
Unlike the few sol­diers and Marines tak­ing the fight to insur­gents in towns such as al-Qa’im on the Syr­ian bor­der, most of the 140,000 U.S. troops in Iraq, includ­ing the guys of the 1 – 5, are not likely to “get some,” as the young war­riors like to say. There are few fire­fights in Ramadi, a city of about 375,000 peo­ple, but lots of road­side bombs. Marines are hun­kered down in their bases. When they get out, they patrol the streets, search cars and houses and act more like police than a mil­i­tary force.
“We’re not on the offen­sive any­more,” said Lt. Brian Huys­man, com­man­der of Alpha Com­pany, from his post at the Anbar Province Gov­ern­ment Cen­ter, which his men guard. “We’re not here to stop the insur­gency, but to help the Iraqi gov­ern­ment grow.“
His men guard the build­ing so the Anbar gov­ern­ment, such as it is, can func­tion. The day after the provin­cial coun­cil elected a new gov­er­nor, he was promptly kid­napped. Now the deputy gov­er­nor has taken over the duties of gov­er­nor. Marines also help set up the new police force, which is non-existent at the moment. The screen­ing process for the new appli­cants is set to start May 22. “It’s a day-in, day-out kind of thing,” Huys­man said thought­fully as he watched Iraqis wave metal detect­ing wands over Anbar Gov­er­norate employ­ees com­ing into the triple-walled com­pound. “There’s no cor­ner to turn. It’s just a slow, slow process.“
By early after­noon, the sun has hit peak inten­sity, and the men of 1^st pla­toon, Char­lie Com­pany are sweat­ing heav­ily in their body armor. They’re on a patrol to inves­ti­gate anti-American graf­fiti on three “known bad guy” mosques near the canal. Three Shi’ites from Najaf, mem­bers of the 18^th Brigade of the new Iraqi Army–the Desert Lions— are with them because mosques are sen­si­tive sites. Marines aren’t to enter unless the Iraqi troops deter­mine there’s rea­son to search. There is almost no traf­fic or peo­ple on the streets, mak­ing the hairs on the back of Marines’ necks bris­tle.
They search a pala­tial house and find a Kalash­nikov mag­a­zine with a sin­gle armor-piercing round in it, in the lead posi­tion. The man who says he lives there isn’t arrested, nor is his ammo con­fis­cated, but he’s put on a watch list. In another house, next to one of the sus­pect mosques, Capt. John Mal­oney, com­man­der of Char­lie Com­pany, talks to the owner, an old man in a white dish­dasha. He offers the Marines water, but the cap­tain defers to the Iraqi troops with him, and asks him to sup­port them and give him infor­ma­tion about insur­gents.
The old man replies that if they are Shi’ite, they have no busi­ness in Ramadi. He fears the insur­gents and their home­made bombs, but he also fears the Shi’ite gov­ern­ment in Bagh­dad and its new army. His fear reveals the fault lines of the new Iraq and the chal­lenge the Marines face in their mis­sion here.
It’s frus­trat­ing. No one knows how long it will really take to build a cred­i­ble gov­ern­ment that all Iraqis believe in. The lack of enemy con­tact — and mis­sions that seem designed to avoid con­tact with insur­gents — frus­trates the leath­er­necks. Marines are trained to fight, acknowl­edges bat­tal­ion com­man­der Lt. Col. Eric Smith, and any Marine will say he’d rather be in a gun­fight than patrolling a city. How­ever, “There will be no knock­out punch here,” Smith said. “It is a daily grind.“
But while the duties are tedious, they’re still dan­ger­ous.
“Try watch­ing your buddy get blown up by an IED set by chick­en­shits who won’t come out and fight,” growled a lance cor­po­ral in 1^st pla­toon of 1 – 5’s Char­lie Com­pany.
Five Marines have died since the 1 – 5 arrived in early March.
And the duties are vital. Iraqi secu­rity forces are not ready to take over, fears of civil war loom and insur­gents can still move rel­a­tively freely. But these bor­ing day-to-day tasks of the Marines in Ramadi are the new Amer­i­can strat­egy in Iraq: Avoid casu­al­ties, hold down the vio­lence and hope the Iraqi secu­rity forces can take the fight to the insur­gency.
Like much of Anbar province, Ramadi is a dirty, dun-colored place, made up of squat two– and three-story build­ings. It tum­bles out in a tri­an­gle from the inter­sec­tion of the Euphrates River and the Hab­baniyah canal, which feeds into Lake Hab­baniyah to the south. And like most Iraqi cities, the divid­ing line is care­lessly main­tained between the city and the coun­try­side. Ramadi just kind of runs out of steam to the south and shrugs into farm­land as it gets closer to the lake.
Roads from Jor­dan, Syria and Saudi Ara­bia con­verge here, before merg­ing into the major high­way lead­ing to Bagh­dad. Before the war, these roads made Ramadi a smug­glers’ haven, one barely under the con­trol of Sad­dam Hus­sein. Today, insur­gents and for­eign fight­ers make use of the same smug­glers’ trails and while it’s not the insur­gent strong­hold Fal­lu­jah was, the deeply con­ser­v­a­tive cul­ture, a pop­u­la­tion that’s 90 per­cent Sunni and a local lead­er­ship made up of tribal sheikhs and imams gives the Marines’ ene­mies plenty of pur­chase in Anbar’s cap­i­tal.
The 1 – 5 in turn occu­pies three bases on the strate­gic tip of the city where the river and canal split: Camp Ramadi, Hur­ri­cane Point and Snake Pit. They have respon­si­bil­ity for the west­ern half of the city while the Army’s 1^st Bat­tal­ion of the 503^rd Infantry Reg­i­ment has the east­ern half. With no police force to speak of — it fell apart ear­lier this year in the face of per­sis­tent insur­gent attacks — the Marines are the main secu­rity pres­ence in the city.
That doesn’t mean they’re happy about it. “I can­not con­tain my excite­ment of going on this patrol,” Lance Cor­po­ral James Bel­lasario, 19, of White Hall, Mont., said sar­cas­ti­cally before 2^nd pla­toon of Char­lie Com­pany began a sweep for weapons caches on the banks of the canal.
He wor­ries that the lack of obvi­ous suc­cesses in Iraq will mean the con­flict slips the Amer­i­can public’s mind. “If that hap­pens,” he said, tak­ing a long drag on a cig­a­rette he is too young to buy in some states, “what the hell are over here for? It will be just like Viet­nam.“
Maj. Ben­jamin Busch, with a civil affairs unit attached to the 1 – 5, sym­pa­thizes. “It’s always nice to have a spe­cific place that’s a focus of your effort,” he said. Ramadi doesn’t offer that, as there are no strate­gic tar­gets other than the good­will of the cit­i­zens, which is vital to the Marines’ efforts here. “When it comes to the actual engage­ments, the Marines are win­ning. But the insur­gents have incred­i­ble power to shut the city down.“
That power is fear, and the peo­ple of Ramadi feel it. When insur­gents plan an attack, the peo­ple know it. Some­times they tip off the Marines, some­times they don’t. Mem­bers of 2^nd pla­toon grum­ble about this.
Such patrols are designed not only to find weapons caches, said Smith, but also to squeeze the insur­gents from oper­at­ing in areas of town and under­mine their abil­ity to ter­ror­ize. The the­ory is that the mere pres­ence of Marines rather than heavy offen­sive actions will prove to Ramadi cit­i­zens the insur­gents can’t pro­voke or drive away the Amer­i­cans because for the insur­gents, just attack­ing the Marines is a vic­tory. Attacks show the Amer­i­cans aren’t in con­trol and under­mine cit­i­zens’ sense of safety.
“In a sense, not hav­ing con­tact is good, because if I’m able to keep the level of vio­lence down until the gov­ern­ment can take over, that’s a suc­cess­ful day,” Smith said. “That gets me to the strate­gic aim of sta­bil­ity.“
Now, as another day ends with­out inci­dent or encounter with the enemy, Mal­oney likens the cur­rent bat­tle for Iraq as a chess match. “The trick here, like chess, is to set up the envi­ron­ment,” he said.
His men moved into posi­tion as he spoke: some on look­out on roofs, oth­ers down the road look­ing for men plant­ing IEDs. Still oth­ers were stop­ping cars in snap vehi­cle checks in an attempt to sur­prise insur­gents. He was con­tin­u­ing to apply pres­sure, but noth­ing to a break­ing point. The goal was to get insur­gents to show them­selves while keep­ing his pieces in play.
“Every time they’ve come out, they’ve lost a pawn,” he said. “And they’ve lost a few knights, too.“
Ramadi’s dust hung in the air, back­lit by the set­ting sun. The muezzin’s call to prayer drifted over the city. The Marines headed back to Snake Pit, know­ing that when they moved out of the area, the insur­gents would come back out to plant more IEDs. As Huys­man of Alpha Com­pany said ear­lier: “They’re try­ing to see where we’re not watch­ing, where they can get close.“
Another day winds down in Ramadi.

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