Month: March 2020

Former UAW President Gary Jones, a labor leader who until recently held the same job that made Jimmy Hoffa a national icon (before his untimely murder/disappearance) has been charged by federal prosecutors with conspiring to embezzle union funds, WSJ reports.

Prosecutors claimed Jones used union funds to finance “trips, liquor and other luxuries” despite presenting himself as a labor leader and man of the people who eschewed the lifestyles of the fat-cat auto execs sitting across from him at the bargaining table.

Jones is now the highest-ranking former UAW official to be charged in the years-long federal investigation of the union.

Back in November, we reported Jones’s resignation, which came just weeks after the union struck a deal with General Motors to end one of the longest labor strikes in history. Jones had already been on ‘leave’ for a few weeks when he left. 10 others – mostly former union officials – have pleaded guilty to federal corruption charges as part of the investigation. Jones was initially believed to not be facing charges, though he was allegedly identified as “UAW official A” in the indictment of another union official.

Over the summer, the FBI raided Jones’s home, which we reported at the time.

If he hadn’t resigned, Jones would have been facing a ‘union trial’ over the alleged misuse of funds, though it’s believed he won’t be facing the proceeding now that he has resigned.

Around the same time, GM sued Fiat Chrysler alleging the auto manufacturer bribed top UAW officials to secure better terms during a labor negotiation. The investigation is believed to have initiated over the bribes, which encouraged the union leadership to screw over the workers to whom they were responsible to brazenly enrich themselves.

It’s just another reminder to always be skeptical of those who portray themselves as ‘champions of the working man’.

Authored by Daisy Luther via The Organic Prepper,

As people across the country frantically attempt to get prepared for the possibility of quarantines and illness during the Covid-19 outbreak, store shelves across the country are getting stripped bare. And with the supply chain interruptions that we’ve written about previously, some of these items may not be coming back any time soon.

I asked a group of readers to show me what their local stores looked like and the photos that follow are the ones they sent me.

Washington State

Franklin County, Tennessee

Kansas City, Missouri

Lake Charles, Louisiana

New Hampshire

Greenville, South Carolina

Michigan

Alaska

Arizona

Tuscon

Scottsdale

Texas

Spring, Texas

Azle, Texas

Waco

Pennsylvania

Pittsburgh

Belle Vernon

Ohio

East Gate

Virginia

Dartmouth, Massachusetts

Oklahoma

Not every store is barren.

Several readers told me things were business as usual in their local stores. Folks from Oklahoma, the Mid-West, Northern Virginia, coastal Virginia, Boston, Niagara Falls, Montana, and Indiana report business as usual in fully stocked stores. I was in Columbus, Ohio on business over the weekend and checked out the stores there. I saw no visible interruption in supplies.

A source from a Walmart store in the midwest told me that the warehouses are now distributing goods like toilet paper and cleaning supplies, and that managers can no longer order specifics

The things that are sold out

There’s a distinct pattern in the things that have sold out (or nearly sold out.)

• Masks
• Gloves
• Bleach
• Lysol spray
• Lysol or bleach wipes
• Toilet paper
• Canned Tuna
• Vitamin C
• Cold and flu remedies
• Bottled Water
• Rice
• Powdered milk
• Hand sanitizer

Surprisingly, there was little mention of canned goods, something I personally grabbed for my daughter’s house.

If you’re looking for a list of quarantine supplies, go here to sign up for my newsletter and get a free PDF checklist. If you want to learn more about preparing for quarantine, check out this article.

It’s not just an American thing.

Many other countries are also seeing shortages. Here are some photos contributed from outside the US.

Australia

Stockholm, Sweden

As well, a friend from Germany told me that cleaning and sanitation supplies were dwindling quickly at the local hospital.

My doctor told me today he will need to cancel his operations room because he can no longer get access to antibacterials and I needed to use a wound spray to change the bandage for a surgery wound and he had to call the pharmacy and use his special doctor pull to get me the last wound spray on hold!

When will things go back to normal?

If the virus continues to spread (along with panic) we can only expect to see more bare shelves.  As we’ve written before, the United States is extremely dependent on China for a wide variety of essential consumer and medical items. Since the factories haven’t been running regularly since early January, there simply are no products to ship.

And if they are being shipped, are they arriving in our ports? That’s the big question, as the virus has been said to last up to 9 days on surfaces. Will the United States allow these shipments to come into the country?

Over the weekend, we warned that as investors hoped for a respite in vomit-inducing swings and soaring market volatility, such hopes would be dashed for one key reason: liquidity in S&P futures was all time low, noting that with “virtually no liquidity, extreme moves to the downside are now very likely which in turn creates a reflexive relationship with risk sentiment, as the lower the liquidity and greater the selloff, the higher volatility surges leading to even lower liquidity, even more selling and so on. In short: absent central bank intervention, it will be virtually impossible for any major player to arrest the market’s collapse.”

Of course, two days later a central bank did intervene, when the Fed announced an emergency, intermeeting 50bps rate cut. Ironically, in doing so, Powell only made things worse, as liquidity only shrank further resulting in market moves that are now straight out of a rollercoaster with the S&P moving more than 2% every since day since the Fed’s rate cut.

So with the rate cut failing to stabilize markets, and in fact doing the opposite as market depth has absolutely imploded, some – such as Morgan Stanley’s derivatives division – is asking this morning “just how bad is liquidity”

To be sure, looking at indicative European markets, Morgan Stanley notes that, at least optically, liquidity is extremely high – after all volumes are off the charts. However, as we have repeatedly noted, liquidity is not volume (it is how much of a market impact a certain sized order creates). In any case, here is what MS said:

• SX5E futures traded $110bn on average per day over the last week (peaking last Thursday @ $125bn, the 5th highest day since 2010). Left chart below.
• Largest 2 weeks of put options delta traded on record (since 2006) – 2x larger than previous peak.
• SX5E cash market daily volumes were on average $21bn over the last week (98th %-ile) and even SX5E dividend futures are seeing all-time record high volumes.

However, away from the obvious, all is not well and the cost of trading has risen sharply. Widening bid/offer spreads and increased impact of trading is related to a reluctance of market markers to offer or bid for meaningful sizes (less HFT participation is likely related). As a result, we now have a market that is very sensitive to natural supply/demand dynamics.

Coupled with increased spreads, another difficulty is the available size in order books. SX5E Futures have been most impacted with an average of ~500 contracts on the top line of the order book over the last week vs. a 6m average of 3,500 (left chart below). Aggregating across single names in the cash market, order books are the thinnest since at least 2015 with the top line now 40% thinner than the 6m average. So, while volumes are high, trading is not easy.

There has also been a sharp relative decrease in the use of the closing auction (right chart). High intraday volatility brings an increase in demand for market-hours liquidity and relatively less passive participation in auctions, all at a time when order books are shrinking!

Options are also seeing record high volumes with $155Bn of SX5E Put delta trading in the last week ($14Bn of gamma, $700MM of vega) and $60Bn of Call delta trading in the last week ($8bn of gamma, $250m of vega) – left chart.

The bid/offer spread in SX5E 2m ATM Put options is much higher vs. the last 6 months (right chart below). Critically, spreads are widening more at the time of day when demand for volumes is highest and the market WANTS to trade – particularly into the EU cash close (market makers may be slow to take overnight gap risk).
 

Finally, sector-wise, spreads widened most in some of the key Cyclical sectors and hit their 90th %-ile  vs 2014 (despite spreads becoming a lot tighter since then). At the theme level, spreads have widened most in the Weak Balance Sheet basket as cash flow concerns are finally starting to drive volatility in the theme higher, and as cash flow fundamentals (now that cash flows are grinding to a halt due to collapsing supply chains) are set to return to market analysis with a bang.

Authored by Lance Welton via VDare.com,

Sir Humphrey Appleby, the Machiavellian senior civil servant in the hit 1980s British sitcom Yes, Minister once famously commented that one should “never believe anything until it’s been officially denied.”

Which meant we could be fairly confident that racial and ethnic differences in susceptibility to Coronavirus exist, because our race-denying Ruling Class so dogmatical refused to consider the evidence.

Now that’s over: a study by a Chinese research group has emerged that offers concrete proof of race differences in susceptibility to Corona virus are very real.

The study – a preprint that has not yet been peer-reviewed – is entitled Single-cell RNA expression profiling of ACE2, the putative receptor of Wuhan 2019-nCov, By Yu Zhao et al., bioRxiv, 2020] and is authored by a group of medical scientists based at Tongji University in Shanghai

The authors explain that “2019-nCov was reported to share the same receptor, Angiotensin-converting enzyme 2 (ACE2)” as the SARS disease, an outbreak of which in 2003 seemed almost exclusively to kill Northeast Asians.

Based on “the public database and the state-of-the-art single-cell RNA-Seq technique” the Chinese scientists “analyzed the ACE2 RNA expression profile in the normal human lungs.” Crucially, they further found (in a comparison of eight individual samples) that the “Asian male one has an extremely large number of ACE2-expressing cells in the lung” in comparison to other races. (The database was based on analysis of eight normal human lung transplant donors of different races.)

As they put it:

We also noticed that the only Asian donor (male) has a much higher ACE2-expressing cell ratio than white and African American donors (2.50% vs. 0.47% of all cells). This might explain the observation that the new Coronavirus pandemic and previous SARS-Cov pandemic are concentrated in the Asian area.

So, there you have it: scientific evidence of how there are, indeed, genetic differences underling the empirical evidence that I have been presenting for weeks that there are racial differences in susceptibility to the Coronavirus (now widely known as COVID-19).

See:

• Do You Know All Coronavirus Victims Appear To Be Chinese? Thought Not!

• STILL No Non-Chinese Deaths From Coronavirus, But The WASHINGTON POST Wants You To Rat Out Your Neighbors Anyway

• STILL No Non-East Asian Deaths From Corona—But CNN’s Sanjay Gupta Won’t Admit It

• Coronavirus STILL Hasn’t Killed Any Whites (Not Counting Iranians). NEW YORK TIMES Ignores, But Concedes Gender Difference. Why?

• Coronavirus Still Discriminating—Reaches Italy, But Italians Also Vulnerable In 1918 Pandemic

And this finding comes as more and more people are beginning notice the racial dimension to Corona virus.

According to Woke Wisdom – which declares that “race” is only skin deep – the Coronavirus should be ravaging Africa by now. After all, Africa is poor, poor health compromises the immune system, and access to medical care is, for most Africans, extremely limited. Surely, Africa should be worse affected that any other continent in the world—as should black minorities within white countries. But, consistent with the findings of the Chinese scientists, this is not the case:

Whether it’s a matter of faulty detection, climatic factors or simple fluke, the remarkably low rate of coronavirus infection in African countries, with their fragile health systems, continues to puzzle – and worry – experts.

To date, only three cases of infection have been officially recorded in Africa, one in Egypt, one in Algeria and one in Nigeria, with no deaths.

This is a remarkably small number for a continent with nearly 1.3 billion inhabitants, and barely a drop in the ocean of more than 86,000 cases and nearly 3,000 deaths recorded in some 60 countries worldwide.

[With only three official cases, Africa’s low coronavirus rate puzzles health experts, France 24, March 2nd, 2020].

Does this low infection rate worry “experts” precisely because it raises the possibility – which I discussed last week – of blacks having a relatively high immunity due to many of them being adapted to a hot and wet ecology which, like the cold and wet ecology of much of Europe, is high in flu and thus selects for flu resistance?

The report then presents a number of hypotheses. Has there been a lack of travel between China and Africa? No. Could it be to do with the climate? France-24 produced a senior medic to reject this one:

“This hypothesis was rejected by Professor Rodney Adam, who heads the infection control task force at the Aga Khan University Hospital in Nairobi, Kenya. ‘There is no current evidence to indicate that climate affects transmission,’” he said.

Professor Adam also used his interview as an opportunity to cast doubt on the race hypothesis:

“While it is true that for certain infections there may be genetic differences in susceptibility…there is no current evidence to that effect for Covid-19.” [Emphasis added, ellipses in original]

It’s not obvious why Professor Adam felt obliged to offer this opinion, since France 24does not directly raise the race hypothesis.

But note that, significantly, he concedes that “for certain infections there may be genetic differences in susceptibility…” Of course, this is known to everyone in medicine (see: Tay-Sachs Disease; Sickle-Cell Anemia). But for some reason, we’re not allowed to ask about it with COVID-19.

And there is “current evidence.” It has not yet passed “peer-review,” it has not yet been critiqued by other scientists, but there is certainly evidence—beyond the circumstantial—that genetic differences seem to explain race differences in the reaction to the Corona virus.

The African media have noticed the surprising lack of deaths as well. Recently, a series of African news outlets reported that “the African Blood Genes” may permit resistance to Corona. In response, the Nigeria-based Centre for Democracy and Development (a democracy-promoting NGO, not a scientific organization) has asserted on its blog that: “experts have said claims that black people were resistant to the virus were ‘false information.’”

It added:

A UK-based specialist in infectious diseases and epidemics, Paul Hunter, told DW [Africa has been spared so far from coronavirus. Why?, February 14, 2020] that the absence of Covid-19 on the continent maybe largely due to luck. There is nothing special about Africa not having seen a case other than pure chance at the moment… “I doubt we will see a big outbreak in Africa, Droplet diseases don’t seem to be as big an issue in Africa,” he said, adding that SARS, a respiratory disease that is also a coronavirus, spread through 26 countries in 2003 but failed to gain a hold in Africa.

From scientific evidence, there is no medical proof that African blood is resistant to the Coronavirus

[Is the African Blood Resistant to Coronavirus? CDD West Africa, February 17, 2020].

Perhaps not. But there is now scientific evidence that Africans (and Whites) are more resistant to it than Asians and that this is for genetic reasons.

Last weekend, we reported that in order to fool the world into believing that its economy is rebounding nicely and that its people have put that entire coronavirus “thing” in the rearview mirror, Chinese officials ordered a factory owner in one of the country’s provinces to “turn on the machines and consume electricity – in his closed factory which has no workers – or he’ll get ‘a visit’.” 

Argh. A Wenzhou-based factory owner tells how district officials are telling him his closed factory (he has no workers) must turn on the machines and consume electricity or he’ll get “a visit”. Higher ups are watching the electricity numbers. The anti-Li Keqiang indicator! https://t.co/PTEBARIDW6

— 优述/You Shu (@You_Shu_China) February 28, 2020

Why must the owner of the empty factory pretend the factory is operating? Because “Higher ups are watching the electricity numbers.” And why are higher ups watching the electricity numbers? Because they know that not only the rest of the world is also watching these numbers, but so is China’s population.  And absent a rebound in electricity usage, which remain far below prior years even if it is to power unused machines in empty factories, China can’t hold out hope to pretend that February was the kitchen sink month as the level of economic activity simply will not rise for months… unless of course Beijing orders the local population to simply consume for the sake of giving the outside world it is consuming as if things were back to normal.

Only they aren’t, and as we warned last weekend, “instead of Chinese ghost towns, we now have Chinese ghost factories whose only purpose is to try to fool its population and the world that the coronavirus pandemic, which is still raging in China, is under control and the Chinese economy is back on solid footing. Of course, neither is actually happening.”

Fast forward to today, when China’s own Caixin, a Beijing-based media group, picks up where we left off and after conducting its own investigation, has found that local companies and officials are fraudulently boosting electricity consumption and other metrics in order to meet tough new back-to-work targets.

As new coronavirus cases in China slowed in recent weeks, local governments in less-affected regions pushed companies and factories to return to work, typically by assigning concrete targets to district officials. Company insiders and local civil servants told Caixin that, under pressure to fulfill quotas they could not otherwise meet, they deftly did what China always does when in a bind – they cooked the books.

This is how a very desperate China is scrambling to give the world the impression that all is well: leaving lights and air conditioners on all day long in empty offices, turning on manufacturing equipment, faking staff rosters and even coaching factory workers to lie to inspectors are just some of the ways they helped manufacture flashy statistics on the resumption of business for local governments to report up the chain.

In short, the Chinese are simply doing what they always do when reporting “data” – they are making shit up.

As we pointed out several days ago, electricity consumption data has regularly been used as a proxy for the business resumption rate when reporting to Beijing, and to the public.

The East China province of Zhejiang has been lauded as a prime example of the nation’s industrial recovery from the coronavirus outbreak by China’s top economic planner, which reported on Feb. 24 that its work resumption rate was more than 90%. But a civil servant in one district of the provincial capital, Hangzhou, told Caixin that from Saturday plants were instructed to leave their industrial equipment idling for the whole day, while offices were told to keep computers and air-conditioners running, when Beijing began checking the resumption rate by examining power consumption figures.

Caixin chose not to name the district to protect the identity of the civil servant, who could face repercussions for revealing the information publicly. But reached by phone, one company insider in the district said they saw such directives in multiple corporate WeChat groups. Another said they received the order too, but their operations had already resumed two weeks prior, and its production lines were in normal operation by Feb. 29. Another executive said they were not informed of the electricity use target, and said they were running at about one-fifth of normal capacity, with only a small proportion of machines in use.

Hangzhou’s target was for corporate electricity consumption that day to hit 75% of what it was on Jan. 8, and that it should return to at least 90% of that by March 10.

The real resumption rate in one industrial park in Hangzhou over the weekend was 40%, the civil servant estimated, far below the 75% target. It means that the chart below showing coal usage is as a proxy for electricity demand is, as we suspected, the latest “data” that China is gaming to represent an economy which is nearly 100% stronger than in reality.

Of course, Beijing is well aware of what is going on, and the district official pointed out China is further subsidizing electricity costs as a way to incentivize businesses to resume, saying that many companies would rather waste a small amount of money on power than irritate local officials.

Insiders told Caixin that in some cases, rather than giving companies direct targets, local governments assigned quotas to local district officials who were then directly responsible for meeting them. Those officials would regularly visit the companies, prodding them to resume production in the guise of expressing “care and support.” That pressure is likely what drove them to switch on their machines.

Zhejiang Provincial Government Deputy Secretary-General Chen Guangsheng boasted to press on Feb. 24 that a segment of manufacturing plants in Zhejiang reported a work resumption rate of 98.6%, and service enterprises 95.6%. More than 99% of the coastal province’s companies with annual export value above $10 million had resumed business, the provincial leader said.

Picking up on our post from the weekend, Caixin next writes that a company in Wenzhou, confirmed it had received a designated power consumption target equal to half of the level before the outbreak, and had been running its air conditioners all day long to meet the goal.

Zhejiang is not the only place where the reality on the ground is said to deviate from government figures. In the small industrial city of Botou, some 230 kilometers (143 miles) south of Beijing, Caixin found factories reported by the local government to have reopened their doors had not in fact resumed production.

The head of one told Caixin that despite reports up the chain, the local government’s unwillingness to risk an outbreak meant it had not actually restarted. “The local government still forbids factories to actually resume work,” the executive said. “We have returned to the offices, but production has not resumed at all.”

He further said the Botou government asked him to falsely report the number of employees who had returned to work, and even went so far as to directly coach workers about how to lie if they received calls from inspectors. Prolonged suspension of production had led to the loss of technicians and business orders, he added, because some of the company’s peers in other parts of China had resumed manufacturing ahead of them.

Replying to Caixin’s request for comment on Monday, the Botou government said at least 228 enterprises in the Botou area had resumed business, but some companies might have said they did not because while they were registered as having resumed, they may not have been prepared to immediately commence production. They said companies were permitted to resume normal business after reporting to the local government, but could only begin operation after officials confirmed virus control measures were in place.

A source in a smaller enterprise in Botou told Caixin companies have been allowed to resume production after meeting certain virus containment requirements, but face the further logistical issues as many rural roads remain blocked. Without a way to get raw materials in and send products out, there’s not much point in businesses returning to production.

Open data from Baidu Maps shows overall traffic flow inside the Botou city over the weekend was still less than half of the average last year, after two weeks of slow recovery starting from Feb. 18. Of course, with everyone instructed to pretend as if things are normal on weekdays, the traffic then was in line with prior years.

Indeed, this confirms what we have observed previously: that whereas congestion data from weekday is almost back to normal across China’s industrial centers as a result of orders to pretend “all is well”, it is the the weekend traffic that indicates what local residents really think about whether the coronavirus is contained. So what does weekend traffic congestion show? Courtesy of TomTom, here is the last 7 day traffic congestion for Shanghai – while weekdays are virtually back to normal, the catastrophic weekend traffic makes clear that virtually nobody is outdoors on days when the locals aren’t ordered to pretend things have stabilizied, confirming that nobody believes the pandemic has been eradicated.

Unfortunately, this also means that none of China’s high-frequency indicators that Wall Street analysts had become so reliant on to determine if the Chinese economy is recovering, and which in recent days have shown a tentative improvement …

… are credible.

Authored by Simon Black via SovereignMan.com,

On October 19, 1987, the US stock market suffered the worst crash in its more than 200 year history, dropping more than 23% in a matter of hours.

It wasn’t just in the United States, either. More than 20 major stock markets around the world, from London to Hong Kong to Australia, fell by similar amounts.

And economists estimate that stocks worldwide lost roughly $1.7 trillion of value (approximately 10% of global GDP at the time) during the October 1987 crash.

The next morning on October 20th, the Federal Reserve announced that they would do whatever it takes to support the economy.

And ten days later they cut interest rates by 0.5%.

Yesterday the Federal Reserve did the same thing. Stock markets worldwide have been jittery lately due to Corona Virus fears, so the Federal Reserve stepped in and cut interest rates by 0.5%.

Honestly there are so many things that are remarkable about this—

First, the Fed already has a regularly scheduled meeting coming up in two weeks on March 17th. But apparently they thought the situation was so severe that they held an emergency meeting yesterday and hastily voted to cut interest rates by 0.5%.

Just think about what that means: 30+ years ago, the Fed cut rates by half a percent after, literally, the worst day in the history of the stock market.

Today’s stock market turmoil is nowhere near as bad as it was in 1987. Sure, the market is down around 10% over the past two weeks.  But where is the law that says the stock market isn’t allowed to fall? Capitalism is all about risk and reward. There are supposed to be periods of decline.

But to the Fed, a 10% correction is catastrophic… SOOOOO catastrophic, in fact, that they couldn’t even wait two more weeks for their regularly scheduled meeting. They had to take immediate action to prop up the stock market.

Ironically, this interest rate cut caused investors to panic even more. After the Fed made its announcement, the Dow Jones Industrial Average plummeted another 800 points.

It’s as if the entire market collectively thought, “Holy cow, if the Fed is taking EMERGENCY action, things must be even worse than we thought.” So the rate cut had the opposite effect as intended.

The Fed also managed to confuse the hell out of everyone… which is something they’ve been doing a lot of lately.

Last year, for example, even when they insisted that the US economy was booming and the unemployment rate was at a record low, they still cut rates by 0.75%… which is typically something they would only do when there’s economic weakness.

And then, yesterday at 10am, the Fed announced that “the fundamentals of the US economy remain strong. . .” But just an hour later they changed their tune and said, “risks to the US outlook have changed materially.”

Go figure, the market tanked even more.

Perhaps most comical is that the entire episode was forgotten by this morning… and the only story that seems to be driving the market is the resurrection of Joe Biden.

So the Fed basically blew a 0.50% rate cut and has absolutely nothing to show for it.

Here’s why that matters…

In the crash of 1987 when the Fed cut interest rates, its benchmark rate was 7.25%. So a half-percent cut was not especially significant.

In 2000 when the US economy entered recession (and the stock market started to fall from its peak), the Fed’s benchmark rate was 6.5%.  So they had plenty of room to cut rates.

In 2007 when the US economy entered recession yet again (and the stock market started to fall from its peak), the Fed’s benchmark rate was 5.25%– still plenty of room to cut rates.

But as of yesterday morning, the Fed’s benchmark interest was just 1.75%. So a 0.5% cut is pretty huge. Do the math– they cut interest rates by nearly a third, down to 1.25%.

[ZH: The market is already demanding another 50bps-plus cut in March…]

This gives them VERY little room to cut rates further when the US economy enters recession, virtually guaranteeing that interest rates in the Land of the Free will go negative.

[ZH: in fact, the market is already pricing that rates will be just 37bps by Dec 2020]

Remember that, in a typical recession, the Fed cuts interest rates by an average of 5%.

Rates right now are only 1.25%… so we could easily see rates at MINUS 3 to 4%.

[ZH: Traders are rapidly ramping up their bets on The Fed going negative]

Just imagine paying money to deposit your savings at the bank (Wells Fargo will have so much fun), or being paid to borrow money…

That is now a very likely possibility in the most advanced economy in the world.

I probably don’t have to tell you this, but negative interest rates will almost certainly be very positive for gold prices, and gold-related investments.

More on that soon… because this emotional roller coaster is far from over.

*  *  *

And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.

We noted earlier this week that King County Chief Executive Dow Constantine said the final negotiations to purchase a motel and convert it into a Covid-19 quarantine village were underway.

On March 4, KOMO Seattle’s Matt Markovich ‘confirmed’ that the “first permanent quarantine village in Washington state for Covid-19 will be the EconoLodge in Kent. We also believe the City of Seattle and King County will establish 3 modular quarantine villages. West Seattle & North Seattle.”

It’s believed that King County officials paid upwards of $4 million for the 84-unit motel on Central Avenue.

I find this very interesting. Media gathering for a tour arrange by King Co at the Econolodge in Kent the new location for a quarantine village for #Covid_19 patients but motel employees they have no clue motel’s new purpose. Receptionist didn’t know anything #komonews pic.twitter.com/jFM8CpXPrm

— Matt Markovich (@mattmarkovich) March 4, 2020

The EconoLodge in Kent, which is in the heart of the Seattle–Tacoma metropolitan area, will be America’s first Covid-19 quarantine village. As cases and deaths surge in Washington state, officials aren’t constructing modular hospitals in two weeks like China did last month, but rather buying existing commercial properties, such as motels, and stuffing infected people within.

Markovich said another “Covid-19 quarantine village using modular units now underway at 1100 block of 128th St. in North Seattle. There has been no public announcement about this so far.”

Prep work now underway for Covid-19 quarantine village using modular units now underway at 1100 block of 128th St. in North Seattle. There has been no public announcement about this so far. #komonews pic.twitter.com/Oi3GTz7NFl

— Matt Markovich (@mattmarkovich) March 4, 2020

Kent Mayor Dana Ralph was visibly upset that King County officials chose the EconoLodge in her district as an isolation center for Covid-19 patients. Mayor Ralph said, “there was no transparency.”

Breaking: Mayor of Kent is upset that city wasn’t told until late Monday that King County will open a isolation center for Covid -19 at the Econolodge in the next 10 days “there was no transparacy” #Covid_19 #komonews pic.twitter.com/SCGi0dIsSX

— Matt Markovich (@mattmarkovich) March 4, 2020

The Kent police chief was agitated as well by county officials. He said the city “cannot prevent” patients from leaving the motel.

Kent police chief upset that motel will be a “voluntary” #Covid_19 isolation center and the city “cannot prevent” patients from leaving motel #komonews pic.twitter.com/msaFIO2R7V

— Matt Markovich (@mattmarkovich) March 4, 2020

You’re watching history in the making as the first Covid-19 quarantine village is erected in Washington state. Expect this to be the norm in cities across America if the virus outbreak worsens.