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By Mark Najarian
Mike Larson, Money and Markets columnist and editor of the Safe Money Report, is out this afternoon. Mark Najarian, the managing editor of Money and Markets, is filling in.
Space flight has been in the news again in recent days. But it’s not what we would want to hear. Two disasters, one claiming the life of a co-pilot, have raised a lot of questions about the future of space travel and whether the U.S. government should be the one running the program or if we should better leave it to the commercial world.
There are no clear-cut answers — it is rocket science, after all.
Here’s what has happened:
A private, unmanned craft carrying supplies for the International Space Station (ISS) exploded seconds after liftoff from a NASA launch pad in Virginia, destroying millions of dollars of supplies and secret, scientific equipment. The resupply mission was being conducted by Orbital Sciences Corp.’s (ORB), a private company contracted by NASA.
SpaceShipTwo, which Virgin Galactic boss Richard Branson hopes will lead his company to leadership in space tourism, broke up on a test flight in California’s Mojave Desert, killing the co-pilot and injuring the pilot. U.S. investigators are examining the wreckage, with much of the attention surrounding the unconventional fuel-propulsion system.
The names, companies, systems, countries and investigators involved make for a complicated mix. Not like the old days, where we had NASA on one side and the Soviets doing their thing on the other.
|Click chart for larger version.|
In the ISS resupply disaster, Orbital’s shares plummeted almost as fast as the rocket itself after news of the explosion. NASA and the company quickly attempted to explain the situation:
“It’s a really tough business,” Bill Gerstenmaier, associate administrator of NASA’s Human Exploration and Operations Mission Directorate, was quoted as saying at a news conference. “Tonight’s events show the difficulties in doing the task of delivering cargo to the space station. We have confidence we can understand the problems and get back flying when we’re ready to fly.”
The ISS did eventually get resupplied. Only, it didn’t come from Orbital’s craft. It came from a Russian supply ship launched from Kazakhstan. It’s not as shocking as when the U.S.S.R.’s Sputnik made it into space before the U.S. could get anything off the ground, but it’s still a bit embarrassing — and damaging to Orbital Sciences’ share price! (They did manage to recoup a bit of the losses in the ensuing days.)
|Last Wednesday, ORB shares plunged almost as fast as its rocket.|
Since the termination of NASA’s space shuttle program in 2011, supplies have been delivered by private contractors, Orbital Sciences and Elon Musk’s Space X. According to CNN, this mission was the third of eight contracted by Orbital in a $1.9 billion contract with NASA. SpaceX is up for a mission in December.
Contracts related to the private sector aren’t immediately in danger, officials say. And there will still need to be an investigation as to what caused the Orbital Sciences mission disaster — perhaps it was no fault of the company itself. But as for public perception, that could be go down in flames.
Interestingly enough, although the ISS had to be resupplied by a Russian craft, Orbital Sciences had been forced to use a modified version of a Russian- (actually Soviet-) built engine in its doomed craft because there are no American-built versions of the engine. So this is certainly not about praising Russian ingenuity, but rather worrying about the demise of America’s efforts in regard to rocket science.
In the Virgin Galactic tragedy, the National Transportation Safety Board is the one handling the investigation, as it is a totally commercial venture. Virgin Galactic reacted to the disaster by saying it was dedicated to “opening the space frontier,” while maintaining a focus on safety.
|“If I had enough money to afford a ticket like that, I don’t think I’d be risking my life by flying into space.”|
Virgin’s plan is to eventually charge $250,000 a person for touristic flights into space. I don’t know about you, but if I had enough money to afford a ticket like that, I don’t think I’d be risking my life by flying into space, until perhaps it had a 100 percent success rate.
Anyway, it all raises questions as to the future of U.S. space activity. Should we keep it all in NASA (and the government’s hands)?
Do we need a bigger budget for NASA to handle space flight in-house? Or is it all better left to the private sector, the recent disasters notwithstanding. Or do we call for the total demise of space exploration and research and better spend the money here on earth? Does America need to refocus educational efforts on science to allow us to maintain the lead in the face of competition from Russia, China, India, Japan and the EU?
Another related issue for our readers to debate: Would you pay big money to become a space tourist? Is the thrill worth the risk? Do we need space tourism at all?
Go to the Money and Markets comments section to voice your opinion.
|Our Readers Speak|
Last week, I wrote about the move to make sports wagering legal in several states, particularly New Jersey. State authorities would love to get the additional revenue for its budgets and to help the ailing casino industry there. Federal law bans sports betting except in four states that put laws allowing it into effect before the ban was imposed (Nevada, Delaware, Oregon and Montana).
The response was split, with many saying the federal government had no right to tell states what they can or cannot do; others saying that whether it’s right or wrong to gamble, making it illegal only drives it underground; and others saying that sports gambling will, in fact, bring on more corruption.
Reader Klaus reflected those views: “First of all, if sports betting is legal in some states, every state should be able to have it if the residents of the state approve. That being said, I do believe that it may not be good for sports, human nature being what it is. I am also not very confident that governments can run anything without causing more problems.”
Reader Allen said it is better to keep it above ground: “Mark, prohibiting anything that many people want to do simply drives it underground and increases criminal activity. … Gambling prohibition is no different than alcohol, or drug prohibition. It increases criminal activity.“
Reader Raymond went the other way: “I’m against betting on sports events. It leads to more and more corruption that will ruin sports as well as infect our society as well. You don’t allow wrong just because everybody is doing it. It would be one more step down the proverbial slippery slope to a corrupt and unsavory world of sports. There have to be better ways of fund raising than this.”
All good comments. I’m still a bit conflicted. I like states getting additional revenue, but I don’t want anything that would endanger the integrity of sports. And right now, I’m on a high with sports — my San Francisco Giants just won their third World Series in five years. I wouldn’t have bet on that in a million years!
|Other Developments of the Day|
After years of cost overruns and delays — and 13 years after the 9/11 terror attacks — the new World Trade Center finally opened for business today. The first workers from publisher Conde Nast moved into 1 World Trade Center, taking over floors 20-44 in the 104-story tower. The skyscraper cost $3.9 billion and is the centerpiece of the 16-acre site where the Twin Towers used to dominate the Manhattan skyline.
“The New York City skyline is whole again, as 1 World Trade Center takes its place in Lower Manhattan,” Patrick Foye, executive director of the Port Authority of New York and New Jersey, which owns both the building and the World Trade Center site, was quoted by AP as saying.
The national average for gasoline prices for regular unleaded gasoline fell below $3 a gallon for the first time since Dec. 22, 2010, according to AAA. A spokesman for the group said that the organization sees the potential for another decline of 5-15 cents a gallon before the end of the year. More than 60 percent of U.S. gas stations are selling it for less than $3 a gallon.
Overseas, the euro zone is still trying to get its house in order. The European Central Bank will be meeting Thursday and speculating surrounds whether it will move to announce new measures to stimulate the economy. But most analysts seem to feel that the ECB will sit tight this week until more evidence is available to indicate the direction of Europe’s sluggish economy.
Any thoughts about the reopening of the World Trade Center or, perhaps, how gasoline prices are reacting in your area to lower oil prices? Share your ideas with other readers by clicking here.
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