On the Baathists Being Welcomed Back

This from Billmon:

By rushing to coax former Baathists back into the Iraqi security ministries and the new Iraqi army, the Coalition may be creating conditions that will boost that percentage of back shooters next time around -- and make sure the next rebellion is both better coordinated and better informed about the Coalition's countermoves.

I don't know who's calling these shots -- Bremer, the Pentagon or the White House -- but whoever it is, their behavior is starting to remind me of a behavioral pattern common among less sophisticated investors. Rattled by a sudden, unexpected drop in the market, they sell. When the market rebounds (as it has a tendency to do), they buy -- usually at about the point the recovery falters and the market heads back down. Then they sell again, taking another loss.

This is called getting "whipsawed."