What is going on in Iowa?

Mitt Romney has been holding on to his lead in Iowa for months now, but the rest of the field has been very fluid with John McCain and Fred Thompson fading, Rudy Giuliani staying in the low double-digits and Mike Huckabee boosting up to a solid second place position. With the voting now about 50 days away, two new stories out of Iowa are making us wonder what is going on in the state.

First, John McCain is rumored to be looking at conceding Iowa and moving on, putting all his energy in New Hampshire. This had been a possibility since his campaign's implosion in July, but never have the rumors been so insistent as now. McCain's hope is clearly in New Hampshire -- and he is stuck in a low fifth position now in Iowa polls. McCain did the same thing in 2000, when he abandoned Iowa but won New Hampshire against Bush shortly after.

The reasoning: (1) McCain is short on cash, and he could put more resources in New Hampshire. (2) He would be able to spin the coming debacle in Iowa by saying he did not compete there... while it would look really bad if he tried but came up with only 5-6%. The problem, though, is that McCain could only win New Hampshire if Romney's momentum there falters, i.e. if Romney does not win Iowa. By abandoning the state himself, who will he benefit? And will he not forgo his ability to try to trip up Romney in Iowa?

And the second story concerns the Rudy Giuliani campaign. The NYT's Adam Nagourney reports today that Giuliani is choosing to concentrate more on Iowa, move staff there and up his advertisement.

Giuliani has spent much of the year snobbing Iowa, so what is he up to here? It appears that Giuliani is getting worried about the possibility of a weak showing in the caucuses - the polls show him third behind Huckabee, sometimes fourth behind Thompson. How will he justify such a weak showing going forward into bigger states he is stronger in? The Giuliani campaign believes that McCain's fading as well as the division of the conservative vote between Thompson and Huckabee and Romney gives them an opening, and while they probably cannot pull off a win here, they could at least come in a very strong third or second. And since good Giuliani result in Iowa would be rather unexpected, he could come out as one of the major stories out of January 3rd -- and then contest New Hampshire!

But Giuliani's move might also pose a risk. Most polls in the past 2-3 weeks have shown that Mike Huckabee could emerge as a very serious threat to a Romney victory. And Rudy Giuliani would be more than satisfied coming in third if Romney loses the caucuses... as that would cut all his momentum, and probably hurt him tremendously in later contests, starting in New Hampshire. Some people had started speculating that Giuliani would start helping Huckabee to try to get him to topple Romney -- but by increasing his own presence in the state will he not make life more difficult for Huckabee? Yes, Giuliani and Huckabee do not have the same constituencies, as the latter is favored by social conservatives. But how many people can hope getting up there with Romney, who has been leading here for months and will likely not collapse. So Romney might benefit if Rudy and Huckabee split up the non-Romney votes.