As we are all very much aware, on April 9^th a passenger was forcibly removed from a United Airlines flight, and faster than that plane can fly, the video had already traveled globally via social media. Obviously this blog is not needed to further explore that this was wrong in so many ways, and right in none. But the name of my blog is “The Story Behind the Picture,” and I do believe that this story warrants a look at that picture.

One of the biggest headlines associated with this story was the effect on the price of United stock (UAL) the day or days immediately following. So I decided that this is a good opportunity to actually look at that price action and perhaps add some perspective on what damage, if any, this news really did. After all, the outcry for boycotts and general disdain for the company as a result of this action should all have a profound effect on the stock price and overall value of the company…or so we’ve been led to believe.

And yet the picture seems to tell a different story, and my career has been spent looking at those pictures and thinking about the story for further clarification only after many of my conclusions have already been reached. So let’s look…

 The top chart above is United Airlines stock (UAL); the bottom is the S&P 500 index. The first day that people were able to buy and sell United stock after the incident was April 10^th, the date referenced by the arrows. The charts show that these two securities have moved in a correlated manner since early March and actually over the last year at least. In fact, the correlation over the past year is 0.853, where a value of 1.00 is an indicator of completely correlated values, i.e. as one moves the other moves exactly the same. We would look at this 0.853 value as a high correlation. If United’s stock had tanked in the week since this went viral, that number would certainly be lower. The correlation over just that week is even closer to 1.00 as it calculates to 0.957, though we don’t have a very large data set and that’s why I ran it for a year. As goes ‘the market’ so goes UAL.

Either way you look at it, United stock has certainly not performed poorly relative to the broader market measure. Since the 7^th, the last trading day before Dr. Dao was dragged from the plane, United stock is down just over 1%. I would not look at this as an indicator that United won’t recover from this debacle. If I was a stockholder, I might even be impressed with how well the stock is holding up. So why even cover this topic if there’s so little going on? Because that’s the point. And that’s why charts are so valuable!

We live in a world of information. I would say we live in a world of TMI – Too Much Information. Especially if you are one to invest based on the fundamentals. When assessing the fundamentals in this case, an analyst would have to go beyond earnings, percentage of seats filled, cost of jet fuel, seasonality, etc. You would be hard pressed to ignore the outpouring of negative press associated with the video and story. But in the end, will it really cost the airline all that much?

There is not much of a warm fuzzy feeling around flying anymore. Forget the business formal dress attire that marked the early days. We no longer have a good feeling about much of anything when we fly. JetBlue serving up free wi-fi, a soda and a bag of chips is as good as it gets. No full meals, free or not. Blankets? Pillows? Bring your own; if you’re lucky the flight attendant can sell you one. Average height or taller? Discomfort awaits. And the cheap fares one might expect from this level of service and comfort has no correlation to what we’re getting. When Peoples Express was created and began our fare wars, at least we knew with them that we were getting what we comparatively paid for. Not anymore.

Flights are packed. All the time. So the risk of United losing many passengers is actually pretty low. There aren’t a lot of other places to go. Fewer airlines and fewer flights translate in the real world to book whatever you can get. Spring break is one or two weeks. We all need the flights at the same time. Whether it’s JetBlue or United, most of us will choose the least expensive at a somewhat convenient time. And if that’s United, then United it is. Same price, same time? Sure, I’ll choose someone different. But I rarely get that luxury.

And all of this information is contained in the top chart of UAL stock price. Per the chart, this is not a big breakdown. There has not been a mass exodus of stockholders, and those that chose to sell based on the news, the fundamentals, may very well buy their shares back soon. They certainly aren’t looking in the rear-view mirror declaring victory. The consumer? Even less victorious. Because while United has changed some policies based on what happened, our personal flying experiences will not improve all that noticeably. So what seemed to be extremely impactful news is really more of a snooze.

Don’t take my word for it, look at the chart. Numbers don’t lie, as the saying goes. And all of our negative sentiment is reflected in the price move, or lack thereof. So listen to the news, check your Twitter feeds. Find out The Story Behind The Picture. But don’t lose sight of the picture when doing it, because your best information is right in front of you; and as mentioned in a previous blog, you don’t need a business degree to interpret it.

As I was looking for a topic to write about, I was struck by the articles I’ve read over the last few weeks pertaining to debt. In many ways, debt is good. We buy houses using mortgages and for many it is the equity they build over the years that helps fund retirement later in life. Student loans are there to help us have a more educated workforce. Auto loans move inventory, and in the years of shorter vehicle life spans, kept us all on the roads. Countries borrow, of course. Our own bond market is one of the largest trading markets in the world.

Debt is good. But only if managed properly. The mortgage crisis is beginning to fade into our memories a bit. The pain endured by so many is no longer at the forefront. When the crisis hit, we all thought about that pain. Now only the people still left with underwater home values or other continuing negative circumstances directly attributable to that crisis think about it regularly. And what happened to cause that crisis. Everyone got loans, the money flowed easily. Rates were not high by historic standards. Builders built. And built. And built.

Good thing that’s a distant memory. Won’t make that mistake again, right? Hmmmm…Car sales figures come out this week. We’ll start there. I hope the numbers are good. We need continuing signs of economic strength. We have a record breaking rally underway that no matter your opinion of the causes, none of us is wishing for a crash. Well, a few maybe, but they’re just talking their positions, so to speak.

But the auto industry may not be so healthy no matter the sales figures. The level of car debt has been getting a great deal of press. That press is not positive. And a look at the chart shows no “Record Breaking Rally” going on in that industry.

The number of people delinquent on car loans is at a high. Subprime auto loans have exploded, and delinquency rates on those loans as calculated by Morgan Stanley Research is over 4.5%, and close to the level reached during the financial crisis. While not near the cost of a home loan default on the economy, cars are one of the larger purchases most people make.

When we look at the impact of debt on our economy, both directly and indirectly, we can’t discount student debt in the equation. In fact, I believe we should be paying much more attention. Remember unlike car loans, most student debt is government backed. Some people are paying attention. Like those betting against our expansion of home debt a decade ago, there are fund managers betting against the student loan levels (dare I use the word “bubble?”).

Michael Burry was featured in the Michael Lewis book “The Big Short.” John Paulson also made billions from that mortgage move. But like the mortgage crisis, there are not a lot of people outside of a few fund managers that are going to see a big benefit if this is a bubble that bursts. And how does it get handled? How much more money can the government print for bailouts? The housing crisis bailout was pegged at $700 billion. We were in the Trillions with a “T” if you count emergency lending. That’s a lot of bailout. We could have bailed out virtually all student debt at the time with the same amount. But it was the banks, not the students that were too big to fail.

Like housing debt, there are large implications of student debt. The effect of these loans built from educations that can easily cost $250 thousand, yes a quarter of a million dollars for college(!) is something that weighs on an entire generation. And while we have not seen much inflation to speak of the last few years, the cost of college education has not stopped going up. Since the financial crisis, student loan debt in the government portfolio has increased over 100% since 2008, from under $600 million to almost $1.3 trillion, per the US Department of Education. We are at well over a trillion dollars. And delinquency rates are over 10%. This is not a pretty picture. We’ve already forgotten we started the blog with car loans…

So let’s move on to the last part of the title…countries. Makes you cringe just thinking about it. Venezuela’s economy is collapsing, but we don’t pay too much attention it seems. We watched the Greek economy pretty much do the same. The Pound has taken a bit of a pounding to say the least, based on Brexit. Now there’s talk in France by the far-right National Front Party of exiting the Euro. This is not simply like Great Britain exiting the European Union and whatever downstream effects that will have. This is exiting the Euro, the currency. And while not probable, we’ve seen some improbable stuff lately.

This would have far reaching impact and could easily disrupt the stability of the EU overall. France’s exit and its exiting the Euro currency would be viewed as a default on the country’s debt, according to Moritz Kraemer, head of S&P’s sovereign ratings. With or without that Frexit, France is at the top of many lists for the next economy to watch for possible collapse. The last couple of years have brought a number of impossible events into the world of possible.

I have little worry about the US economy collapsing. We’ve already dealt with “Too big to fail,” and seem to be coming out the other side intact. We’ve started raising rates. A good sign in a couple of ways. It signals expansion has seemingly taken hold. It also ‘should’ help curb some of that borrowing. But there is a lot of debt already in existence. And much of the larger debt, including education and cars, is in shaky shape. Debt is a double edge sword of the sharpest kind. Again, the US dollar and economy collapsing? Not anytime soon. Impossible? I for one have stopped saying anything is impossible. From easy space travel becoming a reality, to first world countries collapsing, it’s all possible.

And we are all to blame. We love debt. It’s addictive. Especially at low rates as we’ve enjoyed for more than just a few years now. Remember, debt is like a trading position. Properly managed debt is good. Improperly managed debt will break you. So keep an eye on the numbers. Keep an ear out for the possible solutions. But all the while, don’t ignore macro factors that you don’t think will affect your micro investing. We’ve created a world of economic influence where all of this matters. A Lot.