I was in New Orleans yesterday taking part in a market forecast panel discussion sponsored by the CFA Society of New Orleans. The event was held at the Bourbon House. Vinny Catalano, president and global investment strategist of Blue Marble Research, moderated the discussion. The audience included Don Chance, my financial derivatives professor at Virginia Tech, and Pat Mooney, a former student of mine from a CFA review course I used to teach in Boston. Both are now working in Louisiana.
The other panelists included Mark Freeman, an investment advisor, and Dek Terrell, an economist from Louisiana State University. Interestingly, Dek talked about Louisiana's strong economy. Louisiana, which is heavily dependent on the oil industry, is actually benefiting from the high oil prices that are haunting the rest of the nation. He pointed out that there are pockets of desperation in Louisiana, but for the most part, the state is doing well.
Mark warned the attendees that volatility in the stock market is likely to continue, but he had a favorable view overall.
I focused my discussion on the continuing acceleration in the drop in housing prices. Almost all of the problems we are seeing in the financial sector are related to housing. Until housing prices start falling at a decelerating rate, we will not be approaching bottom. I also warned that high energy prices are taking a big toll on consumers. We are already seeing a decline in gasoline demand due to these prices. However, I said oil prices are more likely to fall than rise. Current prices are more the result of the weak U.S. dollar and less a result of strong demand or limited supply. For more than a week I have been trying to short the USO, an oil ETF, to take advantage of the expected decline. But my brokerage firm claims they have no shares in inventory available to short.
Today I am in Austin and will take part in a similar discussion sponsored by the CFA Society of Austin. This event will take place at the Austin Club. I'm also hoping to visit Roux, a trendy restaurant owned by my cousin Dan Janjigian.
