Forbes: Given General Stanley McChrystal's resignation from command in Afghanistan after some scathing comments in a Rolling Stone article and his replacement by General David Petraeus, what, if any, effect do you think that this will have on the markets and in particular on the defense sector? And is this a big shift in U.S. policy?  Gary Shilling: I don't know that this means a big shift in policy, but obviously there's always uncertainty when you don't know who's going to be running the show. I think the general has been very successful there and he's probably got a lot of support, but it's hard to tell with the administration's concern about these rather unfortunate remarks.  Bill Singer: In terms of the stock market, this is a non-event. I don't think the general has been very successful because I don't think we've established a metric for success in these types of wars. American military and foreign policy is very uncertain. I don't think anyone knows what it is that we expect out of Afghanistan and as such, I'm not really expecting much, if any, response from the market. I don't think anybody views the situation in Afghanistan as anything near victory. The removal of General McChrystal may hasten yet another dramatic overhaul of our policy. All I can do is think back to the early days of the Civil War when Abraham Lincoln got rid of General George McClellan. Truman got rid of MacArthur and the world continued and the world will go to sleep and get up tomorrow.  Forbes: Speaking to the potential policy overhaul that you mentioned, should defense companies such as Northrop Grumman ( NOC - news - people ), Lockheed Martin ( LMT - news - people ) and General Dynamics ( GD - news - people ) have any reason to be concerned about a seat change?  Singer: Part of the major problem we've had in Afghanistan is the inability to get supplies into that theater of operations. We know that the Taliban and Al Qaeda have been routinely blowing up the convoys as they cross from Pakistan into Afghanistan. And quite frankly, we're in what's called an asymmetrical war. The United States creates strength by submarines, tankers and aircraft carriers, and these things are being slugged out on the ground. In this day and age, we don't have a clear vision because we're not fighting another state. We're fighting terrorists.  How it's going to impact a major defense supplier, I don't really see that as an issue. When I was watching the other night, the police force of Afghanistan and the troops from the government itself are poorly clothed and they seem to be walking with AK47s, which are 20 to 30 years old, and certainly the folks that are fighting us aren't armed with state of the art equipment either. To that extent, it's sort of like what's going on in the Gulf right now. We have a leaking pipe and with all of the incredible military, naval vessels that we have, submarines and all of the technology in the United States, we can't stop a leaking pipe. So I would suggest that maybe we need to take a step back and figure out where we're all going with a lot of things.  Shilling: I agree that the situation there is a mess, and I also agree that we're geared up to fight other industrialized countries with similar kinds of forces and technology and putting people on the ground against terrorists is something we'd rather not do, but it's what we have been doing since World War II. Korea was certainly that sort of war. Vietnam was very obviously and the terrorist wars since then have been pretty much the same.  It's one of these deals where we've sort of got the tiger by the tail. It's very difficult to withdraw because if we did and there were a successful terrorist attack on American soil, then the president would easily be discredited by encouraging it by withdrawing.  I think in terms of the ultimate effects, I would find it very difficult to see a complete withdrawal, and I don't know that this McChrystal/Afghanistan thing makes much difference because of the threat that if something did happen, maybe quite unrelated, any administration would be so chastised for that that they don't want to run that risk.
The general's words may have been scathing, but his departure's impact will be minimal on the war or the defense sector.