Hey, let’s not forget Iraq! That’s what seems to be happening on Wall Street. Our ongoing war there is practically invisible in the Street’s latest market analyses.

In brief, as a market influence, the 17-month-old conflict, which was supposed to be over and done with by the middle of last year, is turning into a nonevent in the face of such seemingly more pressing worries as surging oil prices and terrorism fears.

I recall over the past year that money managers Michael Steinhardt and Robert Olstein and market guru Elaine Garzarelli, among others, told me they thought the Iraq war was an irrelevant market issue, in part because the conflict was winding down.

Not so. As we all know, the war far from winding down. Anti-Americanism is widespread. Hostilities and sabotage of Iraqi oil facilities are on the rise. About 950 American troops have given their lives in the Iraqi conflict and thousands more have been wounded.

In a chat the other day, money manager Tom Postin of Los Angeles-based P &W Partners reiterated a view he expressed to me last April that events in Iraq would undoubtedly get progressively worse before they got better, and that Iraq, more so than the economy, would decide the outcome of the presidential election.

He now thinks the conflict in Iraq, which he says investors are blindly ignoring, could soon take a more ferocious bite out of the stock market.

In our previous conversation, he felt Iraq was a no-win situation for America because of the lack of any signs of a clear-cut departure strategy, the spreading and nonstop hostilities, and the manner in which the conflict was being conducted. “You can’t win a war,” he once told me, “fighting a gentleman’s war in which an enemy that’s trying to kill you dictates the rules of engagement and you stupidly play by those rules” (like avoiding battles in certain locations, such as mosques, in which the enemy hides, and refraining from killing the leadership of the opposition while it musters more support).

Relating this thinking to present events, Mr. Postin points out that militant Iraqi followers of rebel cleric Muqtada al-Sadr are still battling the coalition, killing and wounding Americans in the process, and yet the cleric is hands off. “We seem to be giving carte blanche to the creation of another Saddam, whose followers are growing and who could become a rallying point for anti-American extremists throughout the Middle East,” he said.

Pointing to our improving economy, which minimizes its impact as an election campaign issue, Mr. Postin predicts the Iraqi conflict will shortly erupt into an increasingly significant market risk. With reports of Muslim extremists pouring into Iraq from neighboring American-hating countries, particularly Iran and Syria, Mr. Postin believes “the Iraqi mess can’t help but get messier because the fighting and killings there are bound to escalate.”

The market, he adds, is treating Iraq too lightly, thinking it’s an old problem nearing an end.

Aside from nonstop fighting in Iraq, which he thinks is the forerunner of escalating problems throughout the Middle East that he believes might draw Israel into the conflict, Mr. Postin expresses concern over the actions of a supposed new American friend, Russia, which he doesn’t trust.

“We’re dealing with a cobra,” he said. He notes Russia is intensifying international dangers by providing two members of the Axis of Evil, Iran and North Korea, with nuclear technology and missile-delivery systems. “We don’t hear or read much about this, but it’s ominous and it could worsen the situation in the Mideast,” he said.

Tack on terrorist threats, oil approaching $50 a barrel, a possible new American president and rising interest rates, Mr. Postin said, and the message is clear-cut: It’s naive to be bullish on the market at this juncture. “The uncertainties,” he said, “are too great and too numerous.”

Our worrywart, by the way, is putting his money where his mouth is. The firm’s $93 million of assets are currently 22% in cash, versus its general cash reserves of 10% to 15%. Interestingly, the average stock mutual fund, also displaying some skittishness, is in an unusually low 4% cash position.

A Republican who plans to vote for Mr. Bush, Mr. Postin thinks if there’s no credible indication soon of an end to the Iraqi conflict, voters may well decide that Mr. Bush, like his father, is to be a one-time president, an event, he believes, that could play havoc with the market.

His parting thought on Iraq: “”We had Little Bighorn, the Alamo, and Vietnam. Let’s not make Iraq number four.”