Cumberland Advisors Market Commentary – Information Is Beautiful (And Useful)

Author: David R. Kotok, Post Date: May 6, 2020

Hat tip to Barry Ritholtz for including in his daily reading list a link to a compelling and enlightening set of coronavirus infographics from Information Is Beautiful. Here is that link:

Cumberland Advisors Market Commentary - Information Is Beautiful (And Useful)

First, a preface. Readers please note that the statistics shown in the infographics are the “official” counts. In the US those statistics are questioned because testing has been and continues to be insufficient. In Brazil we see health failure after failure of the government under President Bolsonaro. (See “The Guardian View on Jair Bolsonaro: a danger to Brazilians,”, and “A Perfect Storm in Brazil as Troubles Brew for Bolsonaro,” Belarus’s autocratic leader, President Aleksandr Lukashenko, nonsensically asserted in March, “‘There are no viruses here. Do you see any of them flying around? I don’t see them either.” He continues to treat the COVID-19 pandemic like a bad flu season that requires nothing more than business as usual and ascribes COVID-19 deaths to underlying conditions. (“‘There Are No Viruses Here’: Leader of Belarus Scoffs at Lockdowns,” In other places, the counting simply hasn’t been able to keep up with the number of bodies. Given all this, the global information used for the models is the best we have, but it is far from completely reliable.

Some suggest that we can estimate total infections by using death rates by cohorts of age, underlying co-morbidities, and other metrics. Year-over-year comparisons help suggest ways to estimate numbers of deaths, from which we can estimate cases of infections, from which we can estimate growing herd immunity.

We can draw inferences: (1) This is NOT a typical flu and never was. (2) It is many times more deadly and hugely dangerous to some population cohorts. (3) We are slowly learning more about it. (4) The process to fully curate informed decisions will take years.

A shortage of adequate testing has led to critical missteps. The CDC’s Dr. Anne Schuchat notes that the lack of early surveillance in the US and in Europe left the CDC in the dark about the threat of infection from Europe. (“CDC official admits that due in part to limited testing and delayed travel alerts, the US missed chances to slow the spread of the coronavirus,”

Lastly, and most important in my view, our federal government isn’t telling us all the truth, and that makes the pandemic worse. President Trump wants no bad news and moves to squelch facts that reveal the US response to be inadequate rather than “great.” (“Trump Moves to Replace Watchdog Who Identified Critical Medical Shortages,”

We may see something similar from some states. Here’s a story from the Tampa newspaper about Florida health officials’ blocking the reporting of coronavirus deaths: “Florida medical examiners were releasing coronavirus death data. The state made them stop,”

There are many stories about a lack of honesty and transparency around COVID-19, both in this country and others. Over the last few months we have cited many. Now to a personal one.

On Saturday March 1, 2020, at a small dinner in Sarasota, a personal friend tied to the local health philanthropy community got an email which disclosed the first COVID-19 case in a local hospital. At first, the hospital remained silent.
(“Anderson: No comment on Sarasota coronavirus spreads misinformation,”

It took two days before the hospital and local health officials confirmed the case. It took press reports and journalists’ inquiries to make the facts public.(“Coronavirus, Florida: Doctor who diagnosed Manatee County Coronavirus was quarantined,”

That same hospital has had protests by nurses about insufficient PPE. That, too, became public thanks to journalists. (“Coronavirus Florida: Nurses protest ‘unsafe working conditions’,”

Here in the United States we are supporting hospitals with much-needed billions of dollars in critical financial aid. While we do this, we must also insist on full daily disclosure: cases, deaths, discharges, staff status, PPE inventory, etc., and on full and publicly available financial disclosure and independent audits of money issues as well as health issues.

Sarasota Memorial Hospital has been the “gold standard” with regard to disclosure and reporting. It is a community hospital with 501(c)3 status. Its communications have been transparent and timely. Other hospitals in the area are “for-profit.” Some of them have caused doubt among local citizens even as they were supported by politicians.

I personally contributed to a political action initiative that defended Sarasota Memorial Community Hospital’s status during the period when Rick Scott was governor and trying to amend Florida law to pressure community hospitals. (“Florida nonprofit hospitals face serious funding cuts,” Bottom line: COVID-19 proves the need for fully accountable community hospitals. A second bottom line: Any hospital of any structure that receives federal emergency funds must pass full disclosure and audit testing, with the results made public for all to see.

My final point. Besides a robust vaccine, the best protection against COVID-19 is the truth. We finance professionals, along with health professionals, must demand it. In the current crisis period, timely, accurate information is more important than ever.

David R. Kotok
Chairman of the Board & Chief Investment Officer
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