What's Important in the Financial World (3/3/2012) Bezos and Apollo 11, Bernanke and the Economy

The concern of EU governments about the fates of Italy and Spain was evident as the region appears ready to increase its emergency funding facilities to 940 billion euros. Spain and Italy are not the most immediate concern, however. Portugal, in a deep recession and almost out of austerity cuts, may soon go the way of Greece as its deficit and debt become overwhelming. Spain and Italy continue to argue that they are healthy. But Spain’s unemployment rate is more than 20%. Its housing markets, state governments and banks are tattered. Austerity measures in Spain have been met by mass union protests that threaten to undermine gross domestic product significantly.

Apollo 11’s Engines Found

Amazon.com’s (NASDAQ: AMZN) founder and CEO, Jeff Bezos, has been successful enough to earn himself a remarkably expensive hobby. He has been interested in outer space since he was a child. Bezos assembled an expert underwater exploration team and sophisticated technology to look for the F-1 engines that initially powered Apollo 11 on its mission that put a man on the moon. The Bezos group has found some or all of the five rockets 14,000 feet down in the Atlantic. He plans to raise them. If movie director James Cameron can make a solo dive to the deepest part of the world’s oceans, why should Bezos not use his fortune for similar pleasures?

Gas Prices Rise Again

Not a single day passes without an increase in the price of regular gasoline, as measured by AAA, based on a national average. That price rose to $3.925 yesterday, up from $3.921 the day before and $3.606 a year ago. In a number of states the price is above $4. These include Alaska, California, Connecticut, Illinois, Indiana, Michigan and New York, which among them have more than 50% of the U.S. population.

Bernanke on U.S. GDP

Fed Chairman Ben Bernanke gave the last of his four lectures at George Washington University. He pointed out that U.S. GDP has risen by about 3% a year over the past 100. He predicted growth could return to that level again. Bernanke did point out two reasons that the recovery could be very long to take hold. The first is housing prices, which continue to fall. This causes an ongoing drop in consumer net worth and thus consumer spending. A lack of small business expansion is the other prime reason. Banks still believe loans to most of them are risky due to a spotty recovery and a lack of assets to guarantee loans.

Douglas A. McIntyre