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Satellite collision highlights risks in a sector that currently has little financial risk protection.

Imagine an object the size of a pea with the potential to destroy a satellite, and you'll get a sense of the potential new risks posed by Wednesday's collision of an Iridium satellite with an inactive Russian military satellite.

The scale of the damage is still being assessed, but so far the U.S. Joint Space Operations Center has identified 600 pieces of debris greater than the size of a tennis ball that were thrown off in the crash (pieces smaller than that are untrackable). Traveling at around 5.0 miles a second, an object much smaller could do a lot of damage, particularly when colliding with one coming from the opposite direction at a similar speed.

"The issue of debris has been hugely underestimated for a long time," said Sima Adhya, senior technical officer at risk analysis firm Sciemus. "It’s a massive problem that the space industry needs to get a grip on."

"There was an incident where a speck of paint chipped the windscreen of a spacecraft," David Wade, space underwriter at Atrium Space Insurance in London, told Forbes.

Most commercial insured satellites operate in geosynchronous orbit, around 22,400 miles above the Earth, where there is hardly any debris, and onboard control ensures that collision risks are small. For these satellites, the main risks covered tend to be mechanical troubles, or a failure at launch, according to Ernst Steilen, head of space underwriting at Munich Re.

Wednesday's collision occurred much closer to Earth, at a level where the majority of satellites, belonging to research institutes or governments, aren't covered by insurance.

Underwriters have so far been unwilling to predict the impact that Wednesday's collision will have on the space insurance industry, which generates around $800.0 million a year. "It is too soon to tell if the recent collision is likely to affect insurance terms, as we do not yet understand the nature of the debris caused by the collision or the ultimate orbit of that debris," said Jeff Cassidy, chief operating officer of specialist insurer Global Aerospace "We will continue to base every policy on its individual risk characteristics and any risk of damage from debris of any origin is just one of the risks faced by in-orbit satellites."

Munich Re's Steilen agrees that the collision, if it remains a one off and doesn’t result in massive losses, is unlikely to have any immediate impact on the industry. "We have had a reminder of what can happened and will be tracking it closely in the future."

The satellite, belonging to Iridium Satellite LLC, collided with the Russian satellite about 500 miles above Siberia, around midday Eastern Standard Time on Wednesday. With increasing demand for satellite coverage for industry from shipping and mining, to Web sites such as Google Maps, lower space orbits are gradually becoming more crowded.

As U.S. jobs disappear at a rapid clip, the official unemployment figure seems understated. While November's 6.7% rate is a full 2% higher than the same time last year, the rate remains well below the 10.8% postwar peak, reached in November 1982. One issue is that the official unemployment number captures only a slice of the total joblessness in the U.S. To be counted as unemployed in this statistic, a worker must not have a job, be currently available for work, and have actively sought employment within the last four weeks. In other words, a lot of the jobless are left out of the government's tally.

Rajeev Dhawan, director of Georgia State University's Robinson College of Business, says the official unemployment rate is "not a good measure of what is happening in the economy. It's drawn from a sample too small and filled with too many assumptions. Absolute job losses and retail sales give a better idea of what's really happening in the economy."

Fortunately, digging deeper into the labyrinth of the U.S. Bureau of Labor Statistics' (BLS) Web site can offer a more complete, if imperfect, picture of joblessness. Since 1993, the BLS has tracked a category of unemployed called U-6, which captures the total unemployed, plus what the agency calls "marginally attached" workers and those employed part-time "for economic reasons." For November 2008, that rate was 12.5%, nearly double the official unemployment rate and the highest since the government started tracking this category.

Outside Looking In

Marginally attached workers are those with no job and who aren't hunting for one but who are interested in working—people who have left the workforce because the employment situation seems so bleak that they've stopped trying. This measure covers anyone who has looked for work in the past 12 months, not just the past four weeks. In November, 1.9 million workers were marginally attached, up 637,000 from a month prior. This category includes long-term unemployed, such as factory workers who can't find a job paying close to what they'd been earning before. Unemployment rates in construction and extraction jobs such as mining hit 12.1% in November, followed by 9.4% in production jobs. That means the ranks of the marginally attached will increase.

Those employed part-time for economic reasons, who are counted as employed in the official statistic, want and are available for full-time work but have had to settle for a part-time schedule. As of November, the number of workers in this category rose by 621,000. There are now 7.3 million involuntary part-time workers, up 2.8 million over the past 12 months.

Contract workers, sometimes known as freelancers or independent contractors, face a special set of problems when it comes to being counted by the government. First, employers aren't required to report layoffs of contract workers to the government, so when companies say they're cutting their contractor workforce—as Google (GOOG) did in October—no one knows by how much. These job cuts are also not recorded in the official job-cut statistics tracked by the government. In other words, the 533,000 jobs lost in the November count don't include any of the tens of thousands of contract workers being slashed from company payrolls as the recession deepens.

Falling Between the Cracks

Some self-employed workers are incorporated into other BLS statistics, but not all of them are counted. Those traditionally considered self-employed, such as independent real estate agents or accountants, are included in the government's household survey of the unemployed. But those working as long-term freelancers for one particular company without the benefits of being staff members—often dubbed "permalancers"—are not. That means a good portion of this group, which the Government Accountability Office says makes up 10% of the workforce, isn't properly tracked. "We really don't know what is happening with the [contractor employment] numbers," says Sara Horowitz, founder of the Freelancers Union, a 93,000-member organization of contract workers. Horowitz says the government should develop better measures of contract workers, perhaps by identifying the number of contractor tax filings with the IRS each year. "An increasing part of the economy is driven by this new workforce, but government agencies haven't updated their methods for counting them," she says.

The BLS does capture other pieces of the unemployment puzzle. It breaks out such demographic categories as education levels. As of November the unemployment rate for college graduates increased less than a percentage point, to 3.1%, while the unemployment rate for high school dropouts rose from 7.6% to 10.5%. The BLS also tracks such categories as age and ethnicity; the unemployment rate in November was 32% for black teenagers, for example. Other data offer state-by-state comparisons of unemployment rates. In the most recent data, which cover the first 10 months of 2008, Rhode Island and Michigan were tied with the highest unemployment rate, at 9.3%, with California next at 8.2%. Though not officially a state, Puerto Rico's rate stands at 12%.

Still, calls for improving the BLS metrics continue. While Horowitz presses for better accounting of contract workers, Georgia State's Dhawan says the surveys need to account for population growth. "Fifty years ago, the [official unemployment] number had some validity," he says. "Now I have little faith in it."

Suze Orman will be a guest on Larry King Live Tuesday.

She is a well-known personal finance expert, and host of The Suze Orman Show on CNBC.

Suze’s commentary is a Larry King Live Blog exclusive.

Last week I watched the CEOs of the big three automakers testify before Congress. Testify is being kind, as what they really seemed to be doing was begging for money. All because their companies refused to invest in what they had to know was true, for more than 20 years.

Those supposedly smart CEOs that you are programmed to believe are smarter than you, didn’t follow the simple law of making choices that are based on fact, on what is known. We have known for years that oil is a limited commodity, yet Detroit did not aggressively pursue higher fuel efficiency (and don’t get me started on the fact that Congress didn’t exactly push them in that direction). They saw their competitive edge erode to foreign car manufacturers, yet they didn’t manage their business to adapt to that competition. And in the process they turned off their main client: Americans, who refused to support products that they now judge to be of inferior quality.

They saw the marketing surveys; they knew they were losing ground to the competition, yet it sure doesn’t seem like they made the massive changes necessary to reinvent themselves for an evolving auto industry.

Yet, I firmly believe that as incompetent and clueless as they were, now is not the time to let the Big Three fail. We as a nation can’t afford the impact of all the lost jobs: both those employed directly by Chrysler, Ford and General Motors, and the millions more whose livelihood is linked to the industry.

Yes, we should all be mad and annoyed that we have to bail out these companies that have been run with an indifference to tackling what is known. My hope is that at the very least, any federal aid will come with serious requirements, oversight and regulations. What is needed is that these CEO’s finally get their heads out of the sand and make the known changes that have always been needed and start running these companies like this is 2008 not 1958.

In the meantime, as I was watching the Congressional hearing I was thinking about you, and how my wish is that you act far more intelligently than the auto CEOs this holiday season. I hope that you have the fortitude and foresight to make choices based on what you know is true today.

• You know you need to build an emergency savings fund that can cover six to eight months of living expenses; so you and your family will be okay if you are laid off.
• You know you need to get serious-finally-about tackling your credit card debt, because you understand how a high unpaid balance can mean big trouble in 2009.
• You know you need to invest more for retirement to have any shot at living comfortably later in life.
• You know you need to sit down with your child and discuss how much you can honestly afford to cover for college

If you honestly know all that, you will not spend money on holiday shopping that should instead be used to build financial security. If you know all that, you will take actions based on what you know so you never have to turn to anyone for a bailout (as if you could get one). Stop looking up to the CEOs of the world as if they are smarter than you. If they are so smart, why have they run their companies into the ground? I want better for you and your family. Focus on what you know you have to do to build security and you will give your family the most wonderful gift of all.

Happy Holidays.
– Suze