Cumberland Advisors Market Commentary – Siesta, Longboat, COVID, Masks & More

Sarasota-based, Cumberland champions mask wearing and other COVID-prevention measures. We also champion business.  We believe that Florida’s economics are better served with basic prevention measures in place. We would not lock down everything. We would require basic civic responsibilities, such as mask wearing in a deadly pandemic. The principle is the same as permitting or restricting drunk drivers.  It’s simple: drive sober, wear a mask in public, protect yourself and others.  Go home and do what you want as long as you don’t threaten others.

Market Commentary - Cumberland Advisors - Siesta, Longboat, COVID, Masks & More

This week, in a nearby Sarasota Publix grocery store, some of the customers were unmasked. Why? One reason is that Florida’s Governor DeSantis issued an executive order preventing local communities from enforcing mask ordinances they instituted to protect their citizens.

We set about to search for local facts that support a simple, enforceable masking ordinance. Not a lockdown. Just “wear a mask in public or pay a fine if you don’t.” Let’s take a look at some interesting demographic data, including COVID-19 infection rates. We’ll compare the communities of (bayfront) Sarasota City (including Lido Key), Siesta Key, and Longboat Key.

Here’s a map:

SRQ Map 2020-12-11(source: Google Maps)

Our findings: if you reside in bayfront Sarasota City, your chances of contracting COVID are 2.8 times greater than if you live in Longboat Key and 1.8 times greater than if you’re in Siesta Key. And, Siesta Key residents are 1.5 times more likely to catch COVID than Longboat Key dwellers are. Here are the ratios in terms of infection rates:

Area (ZIP Code)      Infection rate
(bayfront) Sarasota City (34236) 3.78%
Siesta Key (34242) 2.08%
Longboat Key (34228) 1.35%

(Sources for all demographic data: Florida COVID Action, https://experience.arcgis.com/experience/d2726d6c01c4486181fec2d4373b01fa and ZipDataMaps, https://www.zipdatamaps.com. All data is through November 30.)

So, we ask, why are there such large differences?

We do know that masks make a difference. That’s been clear for months. See, for example, the difference that a mask mandate made in Kansas in cities that enforced the mandate versus communities that opted out: “Mask mandate in Kansas helped slow the spread of COVID-19, CDC research finds,” https://thehill.com/homenews/state-watch/527015-mask-mandate-in-kansas-helped-slow-the-spread-of-covid-19-cdc-research.  Masking reduces disease and deaths; the evidence is consistent worldwide.

Longboat Key, with its low infection rate, has a mask ordinance. Sarasota City, with its much higher infection rate, also has an ordinance. Siesta Key, with an infection rate about midway between the other two areas, is in Sarasota County and the county government has no mask ordinance.

However, we must remember that on Nov. 25 Florida Governor DeSantis extended his September executive order banning local governments from enforcing mask ordinances by imposing modest fines, even as the state’s confirmed case count has now exceeded 1 million and confirmed COVID Florida resident deaths approach 20,000 (“DeSantis extends order banning local governments from enforcing mask mandate violations,” https://www.clickorlando.com/news/local/2020/11/25/gov-desantis-extends-order-banning-local-governments-from-enforcing-mask-mandate-violations/). An ordinance without a penalty or enforcement has few teeth, as we all know.  DeSantis removed the enforcement penalty about two moths ago.

So, our data examination has to consider that mask wearing enforcement was effectively reduced to an individual decision in the middle of the data series.  We asked what other factors may be in play?

It takes 5 minutes to drive from St. Armand’s Circle on Lido Key to bayfront Sarasota.  It’s about 10 minutes drive north to central Longboat Key and about 15 minutes to drive south to downtown Siesta Key. There is constant intermingling of people in the three areas. Sarasota City, Siesta, and Longboat can be seen as a microcosm of our nation, where states with limited COVID-19 restrictions are spreading the disease to stricter neighbors (“States With Few Coronavirus Restrictions Are Spreading the Virus Beyond Their Borders,” https://www.propublica.org/article/states-with-few-coronavirus-restrictions-are-spreading-the-virus-beyond-their-borders).

In addition to this cross traffic, we considered population density. Bayfront Sarasota has 4082 people per square mile; Siesta Key has 2611 people/sq. mi.; and Longboat Key has just 1817 people/sq. mi. as one can see, these density numbers align with the COVID infection rates for the three areas. Bayfront Sarasota is home to the Hyatt, Ritz Carlton, and Westin hotels, with their dense visitor traffic mixing with locals. Lido’s beaches and restaurants on Lido’s St. Armand’s Circle are often well-packed. Comparing Siesta to Longboat, Siesta has a nightlife-oriented downtown; Longboat is notably more sedate.

Another factor could be wealth. Both Longboat Key and Siesta Key are wealthy communities. Median income for Longboat is $108,226, for Siesta $85,068. For bayfront Sarasota the figure is just $44,351. Those numbers also align with COVID infection levels.  We infer that people at lower income levels often work riskier jobs during a pandemic.

Age is also a big factor. We were able to obtain data by ZIP Code for the population over age 65. For our three areas the numbers look like this:

Area (ZIP Code) % over 65 Median income Infection rate
bayfront Sarasota (34236) 40.2% $44,351 3.78%
Siesta Key (34242) 44.50% $85,068 2.08%
Longboat Key (34228) 67.3% $108,226 1.35%

We’ve put the numbers for median income and infection rate up alongside the percentages of over-65s in order to further point up the strong correlation among the three variables: age, wealth, resident population density.

Here are questions to consider.

Are relatively wealthy seniors more likely to wear masks, respect social distancing, and observe COVID precautions? That seems likely, especially when we note that 80% of COVID deaths nationwide have occurred in those 65 years and older. In Florida, that figure is 83%. (“What Share of People Who Have Died of COVID-19 Are 65 and Older – and How Does It Vary by State?” https://www.kff.org/coronavirus-covid-19/issue-brief/what-share-of-people-who-have-died-of-covid-19-are-65-and-older-and-how-does-it-vary-by-state/)

But remember that correlation does not equal causation. To firmly establish causation, we need more extensive data, much larger sample sizes, and the ability to test variables independently. So we can really only draw inferences but do not have proofs.  At the bottom we will demonstrate that the data already exists.

Causation proof aside, we infer that those who live and work around us in bayfront Sarasota or Lido Key are more apt to catch COVID than those who live on the other nearby keys. And we reasonably infer that a town with a masking ordinance and a careful population is a safer place than one without them. Residents on the keys want masking ordinances to protect themselves from disease and death and to limit the economic and business damage caused by COVID.

Here’s a link to a Dec. 3 story in the South Florida Sun Sentinel: “Secrecy and spin: How Florida’s governor misled the public on the COVID-19 pandemic,” https://www.sun-sentinel.com/coronavirus/fl-ne-coronavirus-florida-desantis-spin-ss-prem-20201203-tyjmgkos6bd7vo7vnripqliany-htmlstory.html. Please take the 5–6 minutes to read about the disastrous performance of the DeSantis administration in handling the pandemic. And here’s a story from Boca about the careful handling of the pandemic in tourist-dependent Hawaii versus that in Florida: “Here’s What It’s Like To Travel To Hawaii, And Why It Makes Florida Look So Bad,” https://bocanewsnow.com/2020/12/05/heres-what-its-like-to-travel-to-hawaii-and-why-it-makes-florida-look-so-bad.  And here’s a Tampa Bay Times story about the DeSantis administration’s strong-arm invasion and search of the home of Rebekah Jones, who created and maintains the Florida COVID Action dashboard, the data source we depend on because the Florida Dept. of Health website is suspect: “Florida investigation into COVID-19 whistleblower draws rebuke from Crist, others,” https://www.tampabay.com/florida-politics/buzz/2020/12/08/florida-investigation-into-covid-19-whistleblower-draws-rebuke-from-crist-others/. The video of that raid has now had millions of views worldwide: https://www.tallahassee.com/story/news/2020/12/07/agents-raid-home-fired-florida-data-scientist-who-built-covid-19-dashboard-rebekah-jones/6482817002/.

We have received many emails asking us if it is safe to come to Florida. Our answer: safety and caution must drive any decisions and we recommend visitors do research beyond what the Florida governor tells you.

Lastly, in Florida there are hotels and businesses that want you. At Cumberland, we want you. We have clients and referring consultants throughout the state. They want you.  And they are worried about their safety and yours.

Let’s propose a solution to the data problem.

Wouldn’t it be helpful to have information for every ZIP Code in Florida on COVID-19 testing, (positive or negative) antibody test results, infections that required hospitalizations and infections that did not, recoveries, and a breakdown of hospitalizations with admissions, ICU stays, ventilator uses, recovery discharges, and deaths? All of this could be made available. The raw information already exists.  Think about it: Your ZIP Code is on every item that pertains to you as a Florida resident. And it is on every Florida resident’s health record.

The only thing that stops the process of such useful data gathering and dissemination is Governor DeSantis. Likewise, the only thing that keeps a mask enforcement program from diminishing disease and death in Florida is Governor DeSantis’s executive order thwarting the communities that have passed masking ordinances. DeSantis could institute an effective COVID-mitigation program tomorrow. And he could give the mayors and communities, that are begging for relief, the authority to govern themselves.

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

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Cumberland Advisors Market Commentary – Three Super New Moons (#28)

Sentiment & Statistical Indicators +Three Super New Moons (Item #28)

Market Commentary - Cumberland Advisors - Three Super New Moons (#28)

Some indicators offer guidance. None is perfect. All stimulate thinking. Here’s a sampling about economics, financial markets, health, climate, politics, and, yes, even a forecast from astrology. We’ve saved that for last (#28).

1. The misery index is a long-established statistic. It is simply adding two numbers: the inflation rate and the unemployment rate. Here’s a link to its half-century history: https://www.brookings.edu/opinions/the-brookings-institutions-arthur-okun-father-of-the-misery-index.

2. InflationData.com developed a longer discussion of the misery index, including graphics of a century of political outcomes. They reconstructed it back to the World War 1 era. They also offered some modifications to enhance the index’s forecasting power. A few minutes spent examining the paper may be thought-provoking for readers. Here’s the link: https://inflationdata.com/articles/misery-index. Readers can find the charts showing all presidential elections from Truman to Trump.

3. Not one of these years had a publicized pandemic impact like Covid. The 1917–18 Spanish flu hit in a midterm election period, so its influences were arguably residual by the time the 1920 election cycle arrived. Niall Ferguson developed that history lesson (see https://www.advisorperspectives.com/articles/2020/06/22/ferguson-americas-dumb-reopening). He argues that Covid and past Asian flu pandemics have many similarities, both in regard to their evolution and the level of fatalities. He notes that the 1957–58 government’s response was limited, as the Eisenhower Administration developed a vaccine to protect the military and otherwise ignored the public health issues. Ferguson notes that the Asian flu killed “about 116,000 in the US (the estimates of excess mortality vary widely), which would translate to about 215,000 deaths in 2020,” roughly what Ferguson “expects the final US COVID-19 death toll to be.”

4. We’ve cited Brent Donnelly’s work on the 1968 pandemic (“Echoes of 1968,” https://www.cumber.com/cumberland-advisors-market-commentary-echoes-of-1968/). There are many similarities between 1968 and 2020. In ’68, the misery index forecasted a national political change would occur. It did.

5. Here is the link to the World Happiness Report: https://worldhappiness.report/news/its-a-three-peat-finland-keeps-top-spot-as-happiest-country-in-world. Note that the date is March 2020, so that the compiling of the index precedes the global pandemic surge. One could argue that only Hubei Province in China contributed to the global “happiness” perception when this annual compilation was made. We can only speculate what this index will say in a few months. Please note that America was ranked 18th in the pre-pandemic list.

6. America’s image has dramatically deteriorated as seen from the rest of the world. Here’s Pew Research Center on this matter: “U.S. Image Plummets Internationally as Most Say Country Has Handled Coronavirus Badly,” https://www.pewresearch.org/global/2020/09/15/us-image-plummets-internationally-as-most-say-country-has-handled-coronavirus-badly/. Our reputation declined precipitously this year among many key allies and partners. The implications are serious. Any country that wants to create alliances with other countries needs to be accepted and trusted. America scuttles or belittles America’s traditional geopolitical and economic alliances, including NATO and the scuttled Trans-Pacific Partnership (TPP).  Our allies develop their own paths forward without consulting the United States.

7. The Economic Policy Uncertainty Index gauges global and country-level sentiment. The EPU team compiles indexes from three underlying components: newspaper coverage of policy-related economic uncertainty, the number of federal tax code provisions set to expire in future years, and disagreement among economic forecasters as a proxy for uncertainty. See http://www.policyuncertainty.com/methodology.html.

8. “Total unemployment beneficiaries & the gig economy,” Philippa Dunne, TLRanalytics (chart used with permission)

Total unemployment beneficiaries & the gig economy

9. “A city in Brazil where covid-19 ran amok may be a ‘sentinel’ for the rest of the world,” https://www.technologyreview.com/2020/09/22/1008709/brazil-manaus-covid-coronavirus-herd-immunity-pandemic/. Manaus, Brazil, with a COVID-19 infection rate of between 44% and 66% of the population, may have attained herd immunity, but at a high cost of death and suffering. Now, however, infection and death rates have plummeted there.

10. “SARS-CoV-2 vaccines in development,” https://www.nature.com/articles/s41586-020-2798-3. This article summarizes the status of some 180 vaccines in various stages of development around the world. It suggests that effective and safe vaccines might become available within months rather than years.

11. “Positive about flying? Airlines look to COVID tests that give results in minutes,” https://www.reuters.com/article/us-health-coronavirus-airlines-testing-f-idUSKCN26E0RS. European airlines are working with Swiss drug maker Roche to deploy so-called antigen tests that would deliver results on the spot and help restore passengers’ confidence in flying.

12. “Pandemic slashes worldwide income from work by a tenth: ILO,” https://www.reuters.com/article/us-health-coronavirus-ilo/pandemic-slashes-worldwide-income-from-work-by-a-tenth-ilo-idUSKCN26E1SM. Income earned from work worldwide dropped by an estimated 10.7%, or $3.5 trillion, in the first nine months of 2020, compared to the same period a year ago, the International Labour Organization (ILO) said on Wednesday.

13. “Molecular Architecture of Early Dissemination and Massive Second Wave of the SARS-CoV-2 Virus in a Major Metropolitan Area,” https://www.medrxiv.org/content/10.1101/2020.09.22.20199125v1. A large US study finds that SARS-CoV-2 continues to mutate, with one mutation in particular that makes that strain more contagious and therefore now more prevalent.

14. “Closing the Racial Inequality Gaps: The Economic Cost of Black Inequality in the U.S.,” https://ir.citi.com/NvIUklHPilz14Hwd3oxqZBLMn1_XPqo5FrxsZD0x6hhil84ZxaxEuJUWmak51UHvYk75VKeHCMI=. From the study: “If racial gaps for Blacks had been closed 20 years ago, U.S. GDP could have benefitted by an estimated $16 trillion. If we close gaps today, the equivalent add to the U.S. economy over the next five years could be $5 trillion of additional GDP, or an average add of 0.35 percentage points to U.S. GDP growth per year and 0.09 percentage points to global GDP growth per year.”

15. “Poll: 9 in 10 voters say American needs additional coronavirus relief aid,” https://www.pgpf.org/infographic/new-poll-9-in-10-voters-say-america-needs-additional-coronavirus-relief-aid. From the summary: “The poll released on September 22, reveals public sentiment on a range of national issues, including financial wellbeing, schools reopening, and voting in the 2020 election, which the majority of voters plan to do without heading to the polls on Election Day.”

16. “Tracking covid-19 excess deaths across countries,” https://www.economist.com/graphic-detail/2020/07/15/tracking-covid-19-excess-deaths-across-countries. The official COVID-19 death tolls in many countries are probably undercounts, for a range of reasons explained here.

17. “U.S. Coronavirus Death Toll Tops 200,000,” https://www.wsj.com/articles/coronavirus-latest-news-09-22-2020-11600750066. The data for this report comes from the Johns Hopkins COVID-19 Dashboard, which can be accessed here: https://coronavirus.jhu.edu/map.html.

18. The Morgan Stanley Global Economics Factbook documents the massive monetary and fiscal stimulus undertaken by G4 central banks in response to the coronavirus: “G4 central bank balance sheets have expanded by 17% of GDP in the last six months, compared to 7% over the same period in the Great Financial Crisis. The Fed’s balance sheet has expanded by 14% of GDP over this period (versus 7% in the GFC). The G4 plus China fiscal deficit is expected to rise by 11.3pp of GDP (to 16.8% of GDP) compared to an increase of 6.5pp of GDP (to 10.2% of GDP) during the GFC.” Source: Morgan Stanley Global Economics Factbook, September 22, 2020. (This document is behind a paywall.)

19. The beginning of the autumn surge or wave in COVID-19 spans the Northern Hemisphere. Note how poorly prepared we are, comparatively speaking, in the United States.

The beginning of the autumn surge or wave in COVID-19 spans the Northern Hemisphere

20. “The Fall Surge Is Here,” https://www.nytimes.com/2020/09/22/briefing/schools-supreme-court-china-your-tuesday-briefing.html. The number of new daily confirmed COVID-19 cases in the US jumped more than 15% in mid-September.

21. “A Young Kennedy, in Kushnerland, Turned Whistle-Blower,” https://www.newyorker.com/magazine/2020/09/28/a-young-kennedy-in-kushnerland-turned-whistle-blower. Excerpt: “On his first day, he showed up at the headquarters of the Federal Emergency Management Agency and joined around a dozen other volunteers, all in their twenties, mostly from the finance sector and with no expertise in procurement or medical issues. He was surprised to learn that they weren’t to be auxiliaries supporting the government’s procurement team. ‘We were the team,’ he said. ‘We were the entire frontline team for the federal government.’ The volunteers were tasked with finding desperately needed medical supplies using only their personal laptops and private e-mail accounts.

22. “The N95 shortage America can’t seem to fix,” https://www.washingtonpost.com/graphics/2020/local/news/n-95-shortage-covid/. America still fails on PPE, at great cost to human life. Excerpt: “The patient exhaled. She lifted her tongue for a thermometer. She raised her finger for a blood sugar test, and that’s when she started coughing. One cough can send 3,000 droplets into the air, one droplet can contain millions of coronavirus particles, and now some of those particles were heading for the face of emergency department nurse Kelly Williams.”

23. “Animated Maps: California Wildfires 1910–2019 (ESRI),” https://youtu.be/o58Te06fOkw. This video constitutes a succinct indicator with regard to fire risk, animating a century of California wildfires in just two minutes. Where are the 20 Senators and all the House members who represent the 10 states impacted by wildfires? I thank Jim Ringold for sending the link.

24. “This New Rule To Identify Recessions Could Give Investors An Edge,” https://www.forbes.com/sites/randybrown/2020/01/09/this-new-rule-to-identify-recessions-could-give-investors-an-edge/amp/. This is the Sahm Rule: Economist Claudia Sahm found that if the unemployment rate’s three-month moving average exceeded the minimum from the last 12 months by at least 0.5%, then a recession was in play.”

25. “U.S. Public Now Divided Over Whether To Get COVID-19 Vaccine,” https://www.pewresearch.org/science/2020/09/17/u-s-public-now-divided-over-whether-to-get-covid-19-vaccine/

U.S. Public Now Divided Over Whether To Get COVID-19 Vaccine

26. Hat tip to Cumberland’s Matt McAleer for this chart:

SPX Daily Gain Chart

27. “Is the Stock Market Rooting for Trump or Biden?” https://www.nytimes.com/2020/09/21/opinion/stock-market-trump-biden.html?referringSource=articleShare. Conclusion: “Neither. Wall Street is not as partisan as you think.”

28. Astrologers assert that a major change is evolving right now. We are in a three-month period of “super new moons” and a moon “wobble.” These are supposedly highly unusual forces with powerful effects on the psyche. For a discussion of what this all means, see “Prepare For Heightened Energies And Instability During The Virgo New Moon,” The Wild Child, https://thewildchild.co.za/virgo-new-moon/. Enjoy.

Please be safe and have an interesting Sunday.

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


Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.

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Amarin CEO on Future of Heart Drug Vascepa

Watch the embedded video or at Bloomberg.com: https://www.bloomberg.com/news/videos/2018-11-20/amarin-ceo-on-future-of-heart-drug-vascepa-video




Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.

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Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.