Flyting Chance

What an era to be alive.  Americans have no shortage of entertainment options.  We’re just beginning to be able to see movies in theatres again; Broadway is planning its return; visits to amusement parks are part of the nation’s reopening; and our at-home selection of programs to stream is robust.  Binge watching is available 24/7.  But it wasn’t always this way.  Centuries ago, insults entertained the masses in an artform known as flyting, and the options and availability were also limited.

Flyting seems to be making a comeback in the geopolitical sphere.  While the exchange of insults between the leaders of Russia and the U.S., haven’t been poetic, one might see them as similar to the ritual practiced between the 5^th and 16^th centuries.  In the epic poem Beowulf, flytings were sometimes used as a prelude to battles (let’s hope that isn’t the case today). 

Prices are generally a function of supply and demand.  In short, if a seller is more motivated to complete a transaction, prices fall; the opposite price movement is true if buyers are more motivated.  Unfortunately, markets are don’t exist in a bubble, so outside news and events can cause sudden changes in urgency on either side of a deal.

When President Biden affirmed his belief to reporters that Vladimir Putin is a “killer,” the market didn’t seem to flinch.  But at about the time Russia’s president came back with something along the lines of “I’m rubber, you’re glue…” there was a pronounced increase in interest rates.  In particular, the 10-year treasury rate jumped to its highest level since January 2020 early yesterday morning.  Interest rates are inversely related to bond prices, so a sudden urgency came over sellers in the wake of the name calling.  While this rate increase was correlated to the headline dust-up, one cannot be sure the relationship is causal, especially since there is often more than one reason for any action people take.

Headlines can be scary; they are meant to get readers to engage with the article.  On their own, they will not impact how Atlas allocates our managed portfolios.  Our exercise in daily observations of markets will continue looking for changes in market trends.  If these begin developing, we’ll take action, but powerful leaders engaging in a centuries-old form of communication isn’t enough on its own.