Weekend Open Thread

Happy days are here again....

• Loonie up to 91 cents and change. Will we see parity again soon? Who knows. Ontario and Quebec are going to be in more trouble and manufacturing hit again.
  
• Oil up to $66. Are we going to see $100 oil again? Who knows. In any case, we sure seem to be running out of space for holding the excessive oil produced during the last several months.
  
• Up is down, good is bad, bad is great....fundamentals don't matter. Once again. We do know how this ended the last time, but everyone (Banks, Hedgies et.al) is back in the game with a vengeance, supercharged with the massive guarantees given by the governments of the world and inspired by their dedication to do 'good' to the world.
  
• And it's not misplaced. If they can all succeed in restarting the commodities bubble, so many problems will be solved. Like all those unemployed engineers and tradespeople in Alberta can start working on the oil sands again which will help energy companies produce more and generate more tax for the governments at all levels. Never mind the drag higher oil prices will have on the rest of the world and wilt the 'green shoots.' And we seem to have forgotten how the oil bubble ended the last time. But that was all so last year.
  
• The local real estate seems to be doing just fine again. For all those bullish on real estate, the only thing that matters is- but prices are going up and the sales are strong. This is all bolstered by the arguments specific to a locale- oil, weather, diversified economy etc. We all know how this has ended at other places but given we never completely fell down the cliff and miraculously got a lift on our journey downwards has revived many a faltering spirit. May be we are really different here. As many people would say- this is the last chance to get into the Alberta's faltered real estate market. Sigh.

Recession, Oil Prices and Incogurence

Let's start with the headline of today-the Canadian recession. It's here and is gathering steam. The annualized quarterly number isn't so bad as compared to numbers of other countries, but let's not forget the lag effect. And if you recall, right until the end of October, most people were talking about recession as a 'US problem and not Canadian one.'
But if we were to annualize the December numbers, then our GDP shrank by a whopping 12 per cent. The GDP for November declined by 0.7 per cent. So for the last two months of 2008, the GDP declined by an astounding 10.2 per cent, a pretty bad showing indeed.
But this is a headline you are unlikely to find anywhere in the mainstream media as most people want to believe in the 'We are different', 'we are decoupled', 'our banks are solid' stuff.

M0ving on to oil...
There's something about oil that probably used to be the case with gold. I think several gold bugs are oil bugs now. Garth Turner for example. I like what he writes, at least most of the time, but I'm surprised how he can hold two incongruous viewpoints at the same time. He subscribes to the Peter Schiff hyperinflationary school perhaps.
On one hand he talks about falling economy, a potential depression, falling demand, job losses, massive unemployment and yet in face of that he also talks of $100 oil and a rising stock market. How is that possible? Unless he expects the recession to be short and mild, profits are not rising. And unless job recovery quickly takes hold, there will be a severe demand destruction for oil. The Chindia story is pretty much on hold, if not entirely dead, with Indian economy growing at barely 5 per cent or so in the last quarter. So what will cause a sudden spike in the oil prices? And if oil does indeed rise to $100, then at least one part of Canadian economy will continue to function nicely and that is Alberta. The oilsands investments will resume, the Canadian government and Alberta government's revenue projections won't be so bad and maritimers will flock to Alberta again. Happy days will return to Alberta and the speculators will rejoice once again. But in the face of grimmest economic news in the generation, is it likely to happen? I don't think so.

In similar vein, the oracle of Omaha who seems to be losing his way, says in his annual report that oil prices in $40 or $50 range are too low. Is he just trying to rationalize his purchae of ConocoPhilips? Or is there anything deeper in that statement.
If you recall Mr Buffett visited Albertan Oil Sands in August/September last year. At that time he had remarked (paraphrasing)"You could be the best mining engineer in the world but if you are not sure that oil prices will stay high, then oil sands investments may not be worthwhile."
Again, if thinks $40-$50 oil is not a good price, then why didn't he invest in oil sands? I find that Mr Buffett is now singing the same songs as the mainstream media about inflation, 'cash is trash', 'buy and hold forever', 'stocks are for long run' and so forth. Which is quite a departure from his old days of value investing that was clearly visible during the dot com days.

In other news, the Feburary Calgary Real Estate numbers don't stink too much. Sales, prices, days on market and pretty much all metrics are down with respect to last year.

Few will escape this unscathed

Residents of Alberta island, especially those with strong vested interests in high commodity and real estate prices are about to wake up to a harsh reality. The falling prices of oil were affecting the future prosperity and project based construction and engineering employment. But now there’s another potentially dangerous animal circling on top of Alberta economy-falling natural gas prices.

A lot of people don’t pay much attention to natural gas prices, but they are the bread and butter of the province, especially of big corporate in Calgary and the provincial government royalties. Oil royalties are merely a drop in bucket as compared to what the Alberta government collects from natural gas (by a factor of 6).

Today natural gas prices fell to 2 year lows of around $5. Should the natural gas prices fall further, as they just might in face of severe demand contraction, there will be massive further fallout from this in provincial government and corporate employment levels in the province.

Natural gas business is the cash cow for most businesses in the province while oil sands was the future growth business.

The growth business is now in dumpster and the cash cow will likely come under severe duress. There’s no way this will have a happy ending for the provincial economy.

Right now it’s hard to find a sector of economy that is booming or even going steady, bankruptcy specialists excepted.

If worldwide demand continues to fall across the board as it has, there’s no one that will escape unscathed.

Despite a significant fall in the oil prices, there was a noticeable decline in consumption of gasoline in the first week of this year. Unemployed people don't take skiing trips , take extended vacations or go for frequent shopping trips to the mall. Those who are fearful of losing their jobs show similar behavior.

Everything ranging from dental hygienists to entertainers will feel the pinch of this slowdown. A lot of demand of everything in last several years was just as fictitious as the NINJA loans and demand for virtually everything is falling apart worldwide. In face of this, Canada’s (and Australia, Brazil, New Zealand’s ) economy cannot remain insulated.

It wouldn’t take a genius to figure out what a further collapse in commodity prices will do to Canadian economy and Alberta real estate.

Those who are contemplating buying in this environment at ridiculously inflated prices will have severe cases of post purchase dissonance for many years.

Five years undone

Readers of Bill Booner’s daily missive will recognize a term that he widely used during last five years or so. He used to call the boom as a ‘crack boom.’ A boom in which nothing useful was created but everything was merely an illusion. Just like an eastern scripture says, ‘all that is visible is illusory.’ There was illusion of wealth and prosperity.Of achievement and triumph. Of mastering the business cycle by artificial setting of interest rates by a committee.

And now with oil falling below $35, we have undone almost 4.5 years of speculative and artificial demand of a product that would have made Alberta and Canada the Energy superpower of the world. Demand that was fostered by free credit, rampant speculation and excessive greed. Demand that disappeared as soon as the Hummers were repossessed, the McMansions foreclosed and factories closed down in China.

Too bad, that in one stroke OPEC agreed to reduce the oil production by the entire projected supply of the Oil Sands (by 2020).

This morning sitting in my office with a windchill of -35 outside, I am just wondering how could so many people around the world have been so naïve. The naiveté varied across cultures, continents and locales, based on some sort of fundamental underlying belief that ‘we are different.’ The 'weather in California', 'oil sands in Alberta', ‘Olympics in Vancouver’, ‘Microsoft/Boeing Economy of Seattle’, ‘BRIC magic of Mumbai’, ‘Manufacturing prowess of China’, ‘Financial juggernaut of London’….the list is endless. Every city had its own way of overpowering reason and common sense.

And now, we have to confront reality.

The consequences won’t be pretty. As most of Canada and several parts of the US go through a major cold weather streak, I can’t help but think what would have happened to natural gas prices if this were year 2005 or 2007. But then, until the ‘master thieves of universe’ started placing massive bets in the commodity markets on 50 to 1 leveraged funds, periods of massive spikes and volatility in prices were few and far between. Peak oil was merely an interesting theory and not a call to action for the doomsday crowd. Yet, a good majority of people who believed in a housing bubble did not believe there was a commodity bubble. Or bubble in oil and gas.

The entire Alberta Government and the oil and gas chieftains of Calgary or Houston did not believe that oil prices will fall again. But time and again, the unbridled optimism of investors and market participants is undone by Mr Market. This time is no different. Many on this blog ridiculed me for being a pessimist and believer in gloom and doom. Reflecting on this, I think I had been too optimistic for I did not know the extent of corruption, fraud and deceit in the underlying financial economy.

The reality of Alberta’s economy is that it is entirely dependent on the Energy sector. Once the energy sector slows down, as it is now, everything else will follow. Foreclosures, lay offs, bankruptcies will all rise leading to the prairie land version of rust belt. At least until the next wave of liquidity lifts the sunken boats of commodities. And the coming months and years will illustrate how inane the claims of diversified Alberta economy were.And perhaps for next few decades people will think numerous times before spending half a million dollars on a tiny shoe box.

Happy holidays to everyone.

The Princes of Alberta Island are now running scared....

as Suncor cuts its spending by a third. Yes, a whopping third.
“Our aim is to ensure we are living within our means during a time of market uncertainty, while also making the strategic spending decisions that will allow us to continue our growth path,” Suncor chief executive officer Rick George said in a news release.

Living within our means, how relevant and appropriate. Expect something similar from all the oil sands majors, minors and the expectants. Consumer spending will be the next shoe to drop in a big way even as the falling loonie makes big tickets purchases even more expensive. And the signs of it are clearly imprinted in the August Sales report.

"Alberta was the only province in the country in August to register an annual decline in retail sales."

Any specific reason? I think it's got everything to do with the MEW(or the house ATM or the home equity loans). Alberta was the only province to have registered an YOY decline by August this year and we can see how phony the 'growth story' was. It was never the oil money as we had been clamoring but the retail spending and construction money. Very much like in other parts of the world.

This can't bode well for the $400k shoe boxes in the prairie land, on either side of Lloydminister.

Right now, the loonie is in a free fall and so are oil prices. The other 'kings of the world', Goldman et.al are chopping their workforce by 10 per cent....I think this is just the first step in cuts that will deep, prolonged and painful.

I consider myself to be bearish, but the rapid rate of fall of crude oil, stocks, loonie and everything other than USD has shocked even me. But I can't say there were no warnings.

The Long Term View

I’ve been enjoying the beautiful weather for last few weeks and haven’t been too tempted to sit in front of computer and do a fresh post. I realize a lot of readers would like to see postings more frequently, but I’m somewhat burnt out from a lot of over work during the last couple of years. So more frequent postings would be to my liking as well, but I’m spending more time recuperating and spending rest of the time on doing my work. I’d like to keep this blog going as much as you all want.

Coming to the real estate market in Alberta, so far not much different than what was predicted here on this blog has happened. Sales are slow, prices are gradually falling. There was no spring or summer rush. A lot of people are still paying more than one mortgage. The strong rental market is covering a good part of most ‘investor’s’ second/third/ multiple mortgage payment. Marketing gimmicks(h/t to one of the readers) are in full force but are yielding minimal results. The shoe boxes in Edmonton area are officially advertised for less than $300k. Last year these were at around $350k.

I won't spend time discussing the stats-they have been covered in detail on the realtor blogs. Instead, let's spend some time on the bigger, more fundamental questions. The ones that not too many 'investors' like to ask these days.

As we have mentioned earlier as well, the strong Alberta economy is really a function of construction growth and spending, more than the energy sector per se. And a number of stories in the recent past suggest that we are past the prime spending on construction, at least in this cycle.

On the commodity side, it looks like a bust is in the makings, the price of crude oil and other commodities having fallen by more than 20 per cent in the last few weeks. Should we go to levels below $60 (yeah, it’s a preposterous idea. But until it happened, real estate prices had never fallen in the entire US since the Great Depression) , it will raise some more serious questions, along with the perennial environmental issues, for the big oil contemplating oil sands investment.

But even if price of oil were to remain high for the foreseeable future, the big question is- What would happen once the construction boom runs its course? What would happen once all the oil sands projects are in production? Process industry typically doesn’t generate huge continuous employment like manufacturing industry does. What will fuel the employment growth five years from now? Ten years from now? I am fully aware of the perils of making forecasts, especially for what may happen ten years down the road, but asking some fundamental questions will be a good exercise. Especially those who are about to take a 35 year mortgage.

We have almost close to zero diversification and whatever diversification was done during the period between last bust to about three years ago has come to a naught. A lot of non energy companies have moved away from Alberta (and Canada) due to higher dollar and tight labour market. Those who bought or are still buying overpriced cardboard boxes on minimal down payment and 35 or 40 year amortizations need to consider this seriously.

A look at Windsor Ontario or Detroit will be instructive. Ten years ago it would have been hard to believe that Windsor Ontario would face the downturn it faces now. But this is what happens when an economy is singularly dependent on an industry.

As I’ve harped on so many occasions in the past, based on fundamental valuation metrics (availability of land, prices of raw materials), the current prices in Alberta are totally out of whack. As and when the labour market softens, there will be further downward pressure on the building cost pushing the costs down.

Those looking to buy at this point will do themselves a favor if they were to wait for at least one more year.

January Numbers and other thoughts

We are experiencing the best of the times in this province. Looking around, there are signs of prosperity. Everybody is happily employed or has the best shot they ever had at getting some jobs. Some people have high paying jobs. Lending is still pretty lax and people are still getting their HELOCs based on elevated values of their ‘residential portfolios.’

Yet, the houses are not selling at the pace witnessed in 2005, 2006 or 2007. The sales to listings ratio is close to the lowest levels in many years in both Calgary and Edmonton.

Perhaps, we are slightly past the best of the times in this province.

While the media and the usual suspects are trying desperately to make a trend of an almost statistical aberration in the change in median prices (average isn't the favorite of creb itself), the reality is that if you are a home owner trying to sell your property, you have to wait for a long time to sell your property, if you are able to sell it.

There’s nothing unexpected here.

I won’t spend too much time dissecting the numbers here because it has already been done and also because it’s easy to paint the numbers as ‘half full’ or 'half empty', based on your market perspective. There's nothing conclusive yet that the bubble is deflating.

However, as honest 'students' of markets and not paid shills or 'professional' salespeople , we can look at trends and try to draw some conclusions from them.

The most important trend that hasn’t changed at all is that of continuously rising inventory and falling sales.

As per old criteria, Calgary had only 3500 or so properties for sale in January 2007 and there were over 2631 sales. A hot market.

This year, at month end, Calgary had over 8093 properties and only 1800 sales. That's almost 4.5 months of inventory and it's only January. This is without counting properties on WeList or other FSBO channels.

The price movements do not adequately reflect what the sellers are experiencing as expressed in the days of market statistic.

One of the most unusual things about the Alberta bubble has been the rapidity with which the prices rose and then the abruptness with which the prices began to fall. Even in the worst bubble markets in the US, prices did not double in less than two years. So Alberta is indeed very different from almost any other market, with the exception of perhaps Saskatoon (where Alberta equity locusts went to buy the cheap houses), that we saw price declines on the first sign of major inventory build up. The typical behavior has been inventory build up accompanied by slowing sales ultimately leading to price declines.

But the peak we reached in Alberta was so precipitous that the early declines occurred with severe rapidity, not unlike the fall of NASDAQ from its peak reached in spring of 2000. By early autumn 2000, NASDAQ had almost recovered to over 80 per cent of its peak.

The important questions are- How will things proceed from here?

Alberta market can play out in two different ways. First one, if there’s an 'oil sands shock.' And by that, I mean the sole economic engine powering Alberta’s growth-the oil sands-is adversely impacted by some event. I’m fully aware of the overall lack of correlation between oil prices and real estate, but Alberta which used to be 1 trick pony (Energy sector comprising oil and natural gas) has now become only a half trick pony (oil sands). May be some day natural gas prices will rise and we’ll have a full trick pony again, but we don’t know when that is going to happen. There isn’t much to speak of in terms of diversification of Alberta’s economy and even though energy sector contributes around 30 per cent to our provincial GDP, it is the sector from which every other sector drives its growth. Even the ‘technology companies’ based in Alberta are based on oil and gas sector! No wonder then, if energy sector goes down, Alberta goes bust. The 'shock event' could be of environmental, economic or political nature. If that happens, things will become pretty bad and we’ll probably have to look back at the Alberta of early 80s or the Detroit of today to see how an area that’s dependent on a half trick pony fares when that pony falls ill. Let’s hope and pray that nothing of this sort happens for it will be immensely painful for everyone around. We haven’t diversified a single bit and the unplanned growth only goes on to kill the feeble attempts made at diversification when the energy sector is roaring.

The second scenario, the more likely one, is that there’s no major ‘oil sands shock’ and things just begin to implode-like we have been witnessing since last summer. As mentioned earlier, we still have the best of the times in the province, yet people are not lining up to buy homes. Last year, when the prices were this high, there were multiple bids and the ‘investors’ just couldn’t get enough of Alberta’s real estate. Prices are roughly at the same level that we saw in early 2007 and yet there’s no frenzy to buy. The factors fundamental to Alberta’s real estate are at work. It’s still a lot cheaper to rent a place than to buy it. A house selling for over $400k is easily available on rent for around $1600 to $1800.

We have been looking at renting a bigger place for ourselves and the last few days we have been checking out places for rent. We have been to over a dozen places and every single house was bought either as an investment property or as a consequence of an upgrade. It’s anecdotal, but it clearly indicates a lot of speculative activity and multiple ownership. Speculation that was (and still is in some places) a global phenomenon. In places as far away as Southern tip of New Zealand, to the bustling cities of china, suburbs of Indian metros, resorts and villas in Spain, flats in the UK, condos in Miami, houses in Phoenix and closer home in Vancouver, Victoria and Saskatoon, it has been the same story. Funded by lax lending standards, abetted by the almost non-existent checks and balances in the financial systems, fueled by the ‘getting something for nothing’ mentality of the crowds and the greed of almost everyone involved in the real estate value chain, we saw a massive real estate bubble globally. Yet, every place has its story to cover up the sordid tale of speculative mania. So you don’t need oil sands or anything else to be a part of this frenzy.

What we saw in Alberta, more so than in any other place was a massive ‘hoarding’ of residential product. Hoarding that deprived families a chance of owning a home and improving their quality of life. Hoarding that will prevent stronger migration to this province. Hoarding that prevents a genuine diversification of the province’s economy and ultimately leads to a less than stellar future and extreme dependence on a single industry.

The number of properties under construction is still close to an all time high and they are still building more. The rental market is also getting pretty competitive but there’s no fear or desperation yet. People still have jobs so properties are still getting rented out, even at a monthly loss.

So, is it possible that a spring rebound can occur? Weirder things have happened. Nobody can figure the mysteries of Mr. Market. But based on the inventory levels, falling sales pattern, the extent of speculative activity and the ongoing credit cycle contraction, it doesn’t look likely.

Once again, this is not meant to be a prediction. Make your decisions based on your critical abilities and knowing fully well that you are making a 25/30/40 year commitment to live in frozen tundra (sorry couldn’t resist this after the weather of last 10 days). If you are professionals not dependent on the energy sector, there are better and warmer options out there!

I’m busier than usual and if anyone (bull or bear) would like to write a guest post, please feel free to drop a line to me at albertabubble@gmail.com.

Finally, a request to everyone to keep the tone civil and arguments logical. Remember, this is a forum to give bulls and bears 'equal opportunity' to make their case and present their side of the story without making any personal insults or ad hominem attacks. It will give the readers a good chance to make decisions without having to scroll through scores of meaningless diatribes and flame wars.

Toxic Alberta

There was a very interesting link left on Sheldon's blog - The 14 part documentary (it's not too long though, each part is 2 to 5 minutes long) on Alberta oil sands and the social and environmental impact it is causing in the Fort McMurray region. Although a lot has been mentioned about the environmental fall out and the side effects of the 'dirty oil', it's the first time I've seen something this graphical and detailed.
If you haven't already seen it, do take the time to watch it-just to broaden your perspective and to see the source of the boom and the cost being paid for it.
As others have mentioned here before, in case a not so oil friendly regime wins power in the US, there could be some interesting implications for our province.

Is all the good news already priced in?

Thanks to everyone for wonderful comments.

Despite all the oil sands work and hype, the government will be collecting fewer royalty dollars in the coming years.
So even though a worldwide peak oil in terms of production may be a bit away, Alberta has almost certainly experienced the peak in terms of royalty collections.
Here's an analysis of the same phenomenon.

"It's tempting to ask, why worry? Oilsands production is expected to last 40 to 50 years. But the oilsands will never yield the rich flow of petrodollars pumped into the treasury by conventional oil and gas.Despite the fact that production is rising dramatically, oilsands royalties will go down, from a high of $2.3 billion last year to $1.1 billion in 2009-10.Even when production triples to three million barrels a day in 2020, royalties will be stuck at $1.1 billion, the same level as 2004-05, according to one report."

So any long term investors in Edmonton and Alberta real estate should give it some thought. What will a fall in this inflow do to government spending? And this is the story at almost highest historical oil/gas prices. What will happen if the prices were to fall in half? Slowdown? Recession? Who knows.

As I've repeated on numerous times in this blog: Oil Sands is the Alberta's story for the recent runup in prices. But doesn't everyone in the world already know about Oil Sands? Haven't Edmonton and Calgary prices become the highest in Canada after Vancouver? As for quality of life and its wonderful offerings in Edmonton, even Oilers are having trouble in retaining talent in Deadmonton!
What will a little slip in oil and gas sector do to Edmonton and Calgary? Can it take Edmonton back to where it was just a few short years ago.
Even if some of the very recent predictions for lower oil prices do not become a reality, for how long will the mad rush of oil sands developments continue? And how many jobs will be left once the capital spending phase is over.

The obvious question is: Is anyone getting into real estate even thinking about some of the above things, before buying a crappy $400k home on a 40 year mortgage?
For most people, it's the same story:

Alberta=Oil or Oil Sands=Higher Oil Prices=Higher Real Estate prices=Buy Now or be priced out forever

But I guess it's a sign of our times. Most people have drunk the 'real estate always goes up' serum and fairy tails spun by its effect still appear real.

Alberta Prosperity and Real Estate-Tail wagging the dog?

In the last two years, the number of luxury cars you see in downtown Edmonton or Calgary has gone through the roof. Almost all the restaurants worth anything are completely packed in downtown Edmonton even on a weekday.
Some clear signs of Alberta prosperity right. Yes, but what is the source of this prosperity? Stupid question some would say. It's obviously oil sands and natural gas wealth.
I wouldn't quite agree. I don't really have any numbers to prove my hypothesis, but I'll write it nevertheless.
I think most of the conspicuous prosperity in Alberta is not due to the commodity boom but due to real estate boom. And by conspicuous prosperity, I don't mean trades jobs or McJobs, but the $50k cars, $5k plasma TVs, $200-300 dinners and the stuff. Or perhaps the $400k cars.
I think the average Albertan who is not in business for herself/himself or does not (did not) receive a huge oil/gas bonus would not have become richer but for dramatic rise in real estate. Most Albertans have been touched by this boom, but primarily in terms of expensive real estate. I have not heard of very many stories where any one's wages increased by even 10% over the last few years. No doubt at the lower end, minimum wage climbed from $7 to $12, but someone making $30 didn't suddenly start making $45. And most newcomers struggle with housing and other necessities and would not be creating the conspicuous boom, other than helping boost province's red hot real estate.
As I mentioned in one of my earlier posts, every mania is based on a 'story' and in this case, the Alberta real estate market is based on the oil sands story. It is a plausible story and most average Janes and Joes have bought the story wholeheartedly.
And why not? If the story made them richer by $150k (average increase in their home values), why should they dispute it? Especially when they didn't have to work for an hour to do so. It's free lunch.
So while everyone is talking about Alberta's prosperity being rooted in the oil boom, it is possible that its conspicuous prosperity for average Albertan is actually rooted in real estate.
People are feeling richer not because of the $400 cheques they received a year ago but because of the tremendous increase in real estate. And I don't have any numbers again, but I am pretty sure Albertans are feeling confident because their net worth has gone up quite a bit in the last 2 years. And they must be withdrawing from their 'home ATMs' , as they are so found of saying down in the US, and keeping the Touareg's on street and the restaurants busy.
What will be the impact of this on the Alberta economy when real estate market fizzles? Will it be business as usual if we see moderating/stabilizing oil prices and a declining real estate? In my opinion this is a fairly plausible scenario in the coming months.

Thanks everyone for a wonderful week of discussion.

Are these just isolated events....

Like this cancellation by CNRLOr do they indicate a bigger macro trend? That is some hesitation on the part of bigger corporations on environmental and financial/cost overrun risks with new oil sands investments? We'll have to wait and see.

But if some of these massive investments fizzle out, what is going to support these high prices in Alberta? Thankfully, we have been blessed with wonderful weather that would easily attract thousands of retirees from across the globe :)

On a totally different note, does this ad for condo indicate a sign of things about to come? I mean, we are Edmonton where there are bidding wars going on for property and here we have someone throwing in a 7 year old Merc with a condo. It's not Florida, yet!