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Bechtel is leaving (has left) Iraq.  In case you weren't aware, Bechtel was one of the private firms contracted to help rebuild Iraq. They did, but they can't take it any more, and are now tying up loose ends since their contracts expired. 

This is not insignificant.  Bechtel is one of a few companies who can do such things.   In addition, the current U.S. military is based upon the assumption that private firms such as Bechtel will be integrated into the military's reconstruction efforts.  These companies are trained and willing to operate in hostile environments.  Indeed, the military is absolutely dependent on these private companies' contribution: they are not equipped to do it.  Now Bechtel is leaving: the costs outweigh the potential profits.  That does not speak well of the current conditions in Iraq.  

So where are we in Iraq?  What's going on, and what's next?  Iraq is going to be one of the central issues in the coming year.  The Secretary of Defense has resigned, and will be replaced by Robert Gates, who is currently a part of the President's Iraq Study Group (ISG).  The ISG is a panel led by James Baker, tasked with trying to find a "solution" to Iraq.  With the nomination of one of its members to the Secretary of Defense position, we can only assume that its recommendation will be that much more important.

It is clear that the Bush administration is changing its course: evaluating its options.  But what are they really?  Stratfor, in their most recent analysis, concludes that are really only a few options (with variations within each):

1. Change nothing: "stay the course."

2. Withdraw completely, and let the Iraqis figure it out.

3. Redeploy troops within Iraq, based upon a new philosophy.

As pointed out above, the first one is out.  Trying to secure insurgencies so that Iraqis can develop their government has gone nowhere.   Number two is also unacceptable.  If we leave, Iran will reap the spoils.  We are the only nation that can currently prevent this from happening.  So, we have to stay in some measure.  Thus, the third option is the most likely.  US troops will stop securing daily operations in Iraq, and withdraw to some sort of desert base.  In so doing, they will secure our troops, and check Iran's power.  

Iraqis will be left to sort it out on their own, or start a civil war.  Our objective will be to keep Iran from being the regional hegemon.  I agree with this conclusion, and it will be interesting to see how it  develops in the coming months. 

(Stratfor is an incredible source of insight regarding geopolitical events, and they have free weekly analyses that really shouldn't be.)