Serious Money: That the economic and financial consequences of Hurricane Katrina will be enormous is now widely accepted. There is little agreement, however, on what those consequences are likely to be. Indeed, there is a strong sense that much of what will happen next is largely unpredictable. Many commentators seem to believe that something big will happen but they are not quite sure what it will be.

Such vagueness is understandable; even hard-headed market analysts seem to be humbled by the human costs. But there is also a belief that the complexity of the financial shock is such that there have already been consequences that were impossible to anticipate.

Take equity markets: at a time when every economist is falling over himself to lower US growth forecasts, stocks are looking through all the present and future difficulties and focusing on the benefits from lower bond yields and future reconstruction spending. Most analysts are amazed by the resilience of equities.

Bonds are more easily understandable since the markets now think that the Federal Reserve will find it much harder to continue to push up interest rates. But if falling bond yields are being driven by falling growth expectations that should be of no comfort to stock markets.

Given these sorts of surprises being thrown up by markets the new game appears to be to make a forecast that seems rather unlikely. Take oil prices, which, at time of writing, are falling. This has set up a bit of a bandwagon, with one or two contrarian types speculating that the release of strategic oil reserves will be the catalyst for bursting the oil price bubble.

Chris Wood, of the investment bank CLSA Securities, for example, has forecast that the oil price could hit $40 per barrel by Christmas. Other analysts are recommending that we sell the shares of resource companies like BHP and Xstrata because, like oil, the prices of basic commodities will now fall.

Some of this smacks of wanting to make a headline rather than a sensible forecast. Few analysts saw the rise in oil and commodity prices coming and seem not to want to make the same mistake on the down leg. If we don't have a clue as to what will happen next we might as well make a splash.

One of the many strange outcomes of the hurricane has been a surge in demand for satellite phones. Flooding has knocked out much of the telecommunications infrastructure, and the only things that work, apparently, are satellite phones. There is talk - and it can only be that at this stage - that when it comes to rebuilding the phone network it might be sensible to jump to leading-edge technology.

Established phone companies must think that everything is against them. WiMax, or some variant, could be a direct competitor to 3G, licences for which they overpaid some years ago, and only now are rolling out in Europe. If a competing - and very disruptive - technology is successfully rolled out in the US, it will cause huge problems. And all this at a time when Google and Microsoft have announced they are moving into internet telephony, trying to challenge the market leader, Skype.

The problem for incumbent phone companies is not just that their existing technologies could be rendered obsolete, or even that competitive pressures are growing. The competition, in the form of Skype at least, threatens to utterly destroy the economics of the business. It's tough to compete with someone who offers free phone calls to anywhere in the world.

If an acceleration in the move to next-generation telecoms technology is one of the smaller consequences of the hurricane, the broader market will be looking to one thing above all else for clues about the major implications of the shock. Where the oil price goes from here will pretty much determine everything.

Stock markets would clearly like to believe that oil prices have peaked and that some or all of the speculative air will come out of the bubble. But it is next to impossible to break down the oil price into its justified and speculative components, notwithstanding confident forecasts that now range from $40 to $100 per barrel.

What we do know is that the rise in the oil price, of around $5 per barrel, was driven mostly by increased demand. The oil price rise caused by booming world economic growth was utterly unlike anything experienced before. Previous large rises were almost always caused by OPEC turning off the taps. Such supply-induced price rises have malign effects on the world economy. But demand-led price rises are mostly benign, since they are caused by the world economy being in great shape.

Unfortunately, just as the economists were realising the difference between supply and demand, along came the supply shock in the form of Katrina. And it is in the nature of those kinds of shocks that their effects depend on how long they last.

Equities would love oil prices to fall back quickly to some $50 a barrel. So would I for that matter. That would give the clearest signal that the global economy is not collapsing, while at the same time ensuring that supply issues will rapidly fade.

Markets rarely send such clear and friendly signals of course. And attention could wander from oil prices to other indicators or asset prices, particularly if they start to misbehave (the oil price impact on inflation numbers comes to mind). I'm keeping my fingers crossed.

Chris Johns is an investment strategist with Collins Stewart. All opinions are personal.