This is what keeps Morgan Stanley’s Jim Caron up at night

What in the world was that thing?

The massive white orb that drifted across US airspace before it was shot down by the US Air Force over the Atlantic on live television Saturday triggered a diplomatic maelstrom and blew up on social media.

China insists the balloon was just an errant civilian airship used mainly for meteorological research that went off course due to winds and had only limited “self-steering” capabilities.

The United States says it was undoubtedly a Chinese spy balloon. Its presence prompted Secretary of State Antony Blinken to cancel a weekend trip to China that was aimed at dialling down tensions that were already high between the countries.

The Pentagon says the balloon, which was carrying sensors and surveillance equipment, was manoeuvrable and showed it could change course. It loitered over sensitive areas of Montana where nuclear warheads are siloed, leading the military to take actions to prevent it from collecting intelligence.

A US Air Force fighter jet shot down the balloon Saturday afternoon off the Carolina coast. Television footage showed a small explosion, followed by the balloon slowly drifting toward the water. An operation is underway to recover the remnants.

A look at what’s known about the balloon – and what isn’t:

How do we know it’s a spy balloon?

The Pentagon and other US officials say it was a Chinese spy balloon – about the size of three school buses – that moved east over America at an altitude of about 18,600 metres. The US says it was being used for surveillance and intelligence collection, but officials have provided few details.

Defence and military officials said on Saturday that the balloon entered the US air defence zone north of the Aleutian Islands on January 28 and moved over land across Alaska and into Canadian airspace in the Northwest Territories on January 30. The next day it crossed back into US territory over northern Idaho. US officials spoke on condition of anonymity to discuss the sensitive topic.

The White House said Biden was first briefed on the balloon on Tuesday. The State Department said Blinken and Deputy Secretary Wendy Sherman spoke with China’s senior Washington-based official on Wednesday evening about the matter.

In the first public US statement, Brigadier General Pat Ryder, the Pentagon press secretary, said on Thursday evening that the balloon was not a military or physical threat – an acknowledgement that it was not carrying weapons. He said that “once the balloon was detected, the government acted immediately to protect against the collection of sensitive information.”

Even if the balloon was not armed, it posed a risk to the US, said retired Army General John Ferrari, a visiting fellow at the American Enterprise Institute. The flight itself, he said, could be used to test America’s ability to detect incoming threats and to find holes in the country’s air defence warning system. It may also have allowed the Chinese to sense electromagnetic emissions that higher-altitude satellites cannot detect, such as low-power radio frequencies that could help them understand how different U.S. weapons systems communicate.

How easy was it to shoot down?

On Wednesday as the balloon loitered over Montana, Biden authorised the military to shoot it down as soon as it was in a location where there would not be undue risk to civilians. Due to its massive size and altitude, the debris field of its sensors and the balloon itself was expected to stretch for miles. So, top military and defence leaders advised Biden not to take it down over land, even when it was over sparsely populated areas.

At 2.39pm Saturday, as the balloon flew in US airspace about 6 nautical miles off the coast of South Carolina, a single F-22 fighter jet from Virginia’s Langley Air Force Base – flying at an altitude of 58,000 feet – fired an AIM-9X Sidewinder into it. The Sidewinder is a short-range missile used by the navy and air force primarily for air-to-air engagements; the missile is about 10 feet long and weighs about 200 pounds.

Live news feeds showed the moment of impact, as the balloon collapsed and began a lengthy fall into the Atlantic.

The F-22 was supported by an array of air force and air national Guard fighter jets and tankers, including F-15s from Massachusetts and tanker aircraft from Oregon, Montana, Massachusetts, South Carolina and North Carolina. All pilots returned safely to base and there were no injuries or other damage on the ground, a senior military official told reporters in a Saturday briefing.

What happens to the pieces?

As the deflated balloon was slowly drifting down, US Navy vessels had already moved in, waiting to collect the debris.

The Federal Aviation Administration had temporarily closed airspace over the Carolina coast, including the airports in Myrtle Beach and Charleston, South Carolina, and Wilmington, North Carolina. And the FAA and Coast Guard worked to clear the airspace and water below the balloon.

Once the balloon crashed into the water, officials said, the debris field stretched at least 12 kilometres, and was in water 14 metres deep. That depth is shallower than what they had planned, making it easier to retrieve pieces of the sensor package and other parts that may be salvageable.

Officials said the USS Oscar Austin, a Navy destroyer, the USS Carter Hall, a dock landing ship, and the USS Philippine Sea, a guided missile cruiser, are all part of the recovery effort, and a salvage vessel will arrive in a few days. They said Navy divers will be on hand if needed, along with unmanned vessels that can recover debris and lift it back up to the ships. The FBI will also be present to categorise and assess anything recovered, officials said.

As for intelligence value, the US officials said the balloon’s voyage across the U.S. gave experts several days to analyse it, gather technical data, and learn a lot about what it was doing, how it was doing it and why China may be using things like this. They declined to provide details, but said they expect to learn more as they gather and scrutinise the debris.

What’s the history of spy balloons?

Spy balloons aren’t new – primitive ones date back centuries, but they came into greater use in World War II.

US officials said similar Chinese balloons transited the continental United States briefly at least three times during the Trump administration and once that they know about earlier in the Biden administration. But none of those incidents lasted this length of time.

During World War II, Japan launched thousands of hydrogen balloons carrying bombs, and hundreds ended up in the US and Canada. Most were ineffective, but one was lethal. In May 1945, six civilians died when they found one of the balloons on the ground in Oregon, and it exploded.

In the aftermath of the war, America’s own balloon effort ignited the alien stories and lore linked to Roswell, New Mexico.

According to military research documents and studies, the U.S. began using giant trains of balloons and sensors that were strung together and stretched more than 600 feet as part of an early effort to detect Soviet missile launches during the post-World War II era. They called it Project Mogul.

One of the balloon trains crash-landed at the Roswell Army Airfield in 1947, and air force personnel who were not aware of the program found debris. The unusual experimental equipment made it difficult to identify, leaving the airmen with unanswered questions that over time – aided by UFO enthusiasts – took on a life of their own. The simple answer, according to the military reports, was just over the Sacramento Mountains at the Project Mogul launch site in Alamogordo.