For the moment, at least, Wall Street is greeting the Russian invasion of Georgia and the Kremlin’s broken promises of a cease-fire and a withdrawal of its troops from the former Soviet state as just ho-hum. Oil prices, in particular, have been falling despite the invasion, with light, sweet crude down $0.99 yesterday, to close at $115 a barrel on the New York Mercantile Exchange.

A former Merrill Lynch strategist, Bill Rhodes, argues that Wall Street’s dismissal of the burgeoning conflict in Georgia is a mistake. “The situation is a matter of considerable concern and bears close watching because it raises an obvious question: How far is Russia ready to go?” he says. “Is there yet another Russian assault to come, such as in Azerbaijan, Ukraine, or Armenia? Or maybe the Baltic states?”

While Wall Street, which is still reeling from the shock of a serious liquidity squeeze, views the invasion as a nonevent, Mr. Rhodes, who heads up the Boston-based institutional adviser Rhodes Analytics, says that “the market would react sharply if there’s another Russian military action.” Another invasion, he says, “wouldn’t also be looked upon as a nonevent.”

At press time, Russian troops within Georgia were still occupying the city of Gori, the birthplace of Josef Stalin.

One of Georgia’s big economic enticements is the world’s second biggest pipeline, a key transit point for oil to Europe and America from the Caspian region. The pipeline, which delivers an estimated 800,000 barrels a day, or about 1% of the world’s supply, starts in Azerbaijan and extends to Turkey, where the oil is loaded on boats for transportation across the Mediterranean.

An energy consultant at West Coast liquidity tracker TrimTabs Investment Research, Bob Berke, says an explosive situation could develop. Russia could easily destroy the pipeline if it wanted to, and “if it did,” he says, “it would be an act of war against Europe and America, all hell would break loose, and it would likely drive up the price of oil to about $170 a barrel.”

A London-based money manager, Raymond Stahler, views Russia’s refusal to honor its promises of both a truce and a cease-fire in Georgia as a clear message that it intends to reassert itself as a more prominent and forceful player on the world stage, which he believes is apt to create more international tensions. “Since no one at this time will stand up to them, at least militarily, I think we’re likely to see increasing Russian use of military force and additional support of the West’s enemies, including sponsors of terrorism,” he says. “In short, it’s a rebirth of the Cold War.”

Mr. Stahler, who is a principal of Stahler Dearborn Ltd., also thinks Georgia’s problems with Russia may be far from over, especially since Prime Minister Putin has made it clear he firmly opposes the pro-Western Georgian government and its desire to join the North Atlantic Treaty Organization.

This conflict, in addition to Mr. Putin’s personal disagreements with some prominent Russian business leaders and widespread internal corruption at the local government level, raises questions about the stability and goals of Russia’s leadership and putting money to work in the Russian stock market.

Money manager John Connor, who about a decade ago created the Third Millennium Russia Fund, which in the past five years has posted an impressive 33% annual growth rate, takes a far less ominous view of the invasion. “It’s more of a geopolitical game, essentially a warning to both America and NATO,” he says. “Georgia started something, and Russia started something bigger.”

Mr. Connor expects the Russian-Georgian crisis to be resolved within a few weeks, owing to international pressure, with Russia returning the territory to Georgia. He also expects Mr. Putin, whom he describes as “a pretty smart guy, but who is cranky and shoots from the hip,” to retire in a year or two and let President Medvedev, his former chief of staff, run the show.

This year, Mr. Connor’s fund, which has assets of $120 million, is on the losing side, as the Russian market — stung by a reflection of the meltdown of stock markets around the globe, falling oil prices, and the Georgian crisis — has fallen about 23%. The fund itself is down about 20%, after having been up 8% at the end of June.

Mr. Connor acknowledges that investing in Russia isn’t for widows and orphans, but “you’re getting a great return for high risk and for putting up with a lot,” he says. He points in particular to such positives as lofty 8% economic growth, a strong currency, lots of undervalued stocks, big dividends (many in the 6% to 9% range), and an average low price-to-earnings market multiple of eight.

Some of his top picks include Russia’s biggest bank, Sberbank, telecommunications giants VimpelCom and Mobile TeleSystems, and fertilizer producer UralKali.

The bottom line: Is Mr. Putin, as some speculate, trying to re-create the Soviet Union? If so, as one trader put it, “they should change the name of the James Bond film to ‘From Russia Without Love.'”

dandordan@aol.com