Financial Review

Nice Little Planet

Sinclair Noe — November 18, 2015

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DOW + 247 = 17,737
SPX + 33 = 2083
NAS + 89 = 5075
10 YR YLD + .01 = 2.27%
OIL + .03 = 40.70
GOLD + .20 = 1071.00
SILV – .01 = 14.28

Stocks rallied the most in four weeks, while Treasuries pared losses. The dollar traded near a seven-month high against the euro. Oil was little changed near a two-month low after dropping below $40 a barrel in New York for the first time since August as producers’ output swelled global inventories to a record. U.S. supplies climbed to the highest for the season in more than 80 years.

A predawn police raid on an apartment building in a Paris suburb led to the deaths of two extremists, including the alleged ringleader of last weekend’s attacks – although there is no official confirmation; the raid also resulted in seven arrests. Police also found plans in the apartment for more attacks on Paris. French President Hollande renewed his case for an extension to a state of emergency decreed after the attacks and for changes to the constitution that he said would make France safer. Meanwhile, a French aircraft carrier headed to the eastern Mediterranean to intensify the bombardment of ISIS positions in Syria.

Hacking collective Anonymous accessed and took down more than 5,500 social media accounts associated with ISIS. As part of its efforts, Anonymous published a guide for supporters of how to identify and clean out ISIS-linked accounts.

While we have all been following the news about the attacks in Paris it is important to remember that ISIS is not going to win; they will not establish a caliphate in Paris, nor will they take over New York, or LA, or Kansas City. The point is not to minimize the horror. It is, instead, to emphasize that the biggest danger terrorism poses to our society comes not from the direct harm inflicted, but from the wrong-headed responses it can inspire. The goal of terrorists is to inspire terror, because that’s all they’re capable of. And the most important thing we can do in response is to refuse to give in to fear.

The Federal Reserve published the minutes of the last FOMC meeting and earlier today, 3 more Fed policymakers said they support a rate hike in December.  Atlanta Fed President Dennis Lockhart said Wednesday he is comfortable moving rates higher “soon”; Cleveland Fed President Loretta Mester repeated that she thinks the economy can handle a small rate hike; Richmond Fed President Jeffrey Lacker, remember he voted for raising rates in September and October, said he has his “fingers crossed” that conditions will finally be right for a rates liftoff in December.” And that is pretty much what the Fed minutes revealed – the Fed is ready to raise interest rates at the next FOMC meeting on December 16.

Sovereign debt spreads are widening as investors look to Fed tightening and ECB easing in December. The extra yield on two-year Treasury notes over their G7 peers has widened to 76 basis points, the most since 2007. In the euro-area, meanwhile, Germany this morning sold two-year notes at a record-low yield of minus 0.38 percent.

New home construction declined by 11% in October to an annual rate of 1.06 million, marking the lowest level since the early spring.  Housing starts in September were also revised down to a 1.19 million annual rate from 1.21 million. Permits for single-family homes, which account for about three-quarters of the housing market, rose 2.4% in October to an annual rate of 711,000. That’s the highest level since the end of 2007. The decrease in starts last month was primarily due to a 25.1 percent slump in work on multifamily homes.

BlackRock, the world’s largest asset manager, is winding down a global macro hedge fund after losses and investor redemptions eroded assets. BlackRock Global Ascent lost 9.4 percent this year, according to an October investor document, on track for its worst year since inception in 2003. The fund, which had $4.6 billion in assets just two years ago, has shrunk to less than $1 billion as of November 1.

Members of the Organization for Economic Cooperation and Development have agreed to scale back public financing for coal-fired power plants. The policy would cut off financing for 85 percent of coal projects going forward. The new policy, which will take effect in a year, would provide subsidies only for so-called “ultra-supercritical” coal-fired power plants — those built to the most stringent environmental standards.

Square is due to price its NYSE IPO later today in an offering that’s being closely watched for what it means for the potential listings of other “unicorn” tech companies – those worth over $1 billion – such as Airbnb and Dropbox. Amid a difficult market for tech IPOs, Square set its price range at $11-13 a share, valuing the company at up to $4.2 billion, or 30% below its worth in a private fundraising round a year ago. Trading in the firm’s stock is scheduled to start on Thursday.

Canadian Pacific has laid out its proposal to acquire Norfolk Southern. Norfolk Southern said will “carefully evaluate” Canadian Pacific Railway’s $28.4 billion acquisition offer, but has described the bid as “low-premium” and warned that it would face significant regulatory obstacles. Canadian Pacific is offering around $94.94 in cash and stock, or a 9% premium to Norfolk Southern’s closing price of $87 yesterday. The combined rail network would be worth about $47 billion.

Air Liquide has agreed to buy Airgas in the largest takeover in the industrial-gases sector in nine years. Air Liquide is offering $143 a share for an enterprise value of $13.4 billion. The deal will make Air Liquide the world’s biggest supplier of industrial gases and give it a dominant position in the U.S.

The Justice Department has unconditionally approved Schlumberger’s $12.7 billion proposed purchase of Cameron International, putting the companies on track to close the deal early next year.

Federal prosecutors are actively pursuing criminal cases against executives from Royal Bank of Scotland and JPMorgan Chase for allegedly selling flawed mortgage securities. The Wall Street Journal reports investigators are working to establish that the bankers ignored warnings from associates that they were packaging too many shaky mortgages into investment offerings and are weighing whether they can prove that constituted fraud.

At RBS, prosecutors are scrutinizing a $2.2 billion deal that repackaged home mortgages into bonds in 2007. In a 2013 civil settlement with RBS, the Securities and Exchange Commission described the lead banker on that deal, whom it didn’t name, as trying to push it through over concerns of the diligence department.

The JPMorgan probe has long been stalled because officials have been divided over whether they have sufficient evidence to charge anyone with a crime but it has recently picked up steam. While major banks have had to pay billions of dollars in settlements over the financial crisis, there has been a notable lack of criminal convictions.

So, after about 8 years, the Department of Justice isn’t actually announcing indictments, but they are picking up steam.

New York Attorney General Eric Schneiderman has subpoenaed Yahoo in his investigation into the multibillion-dollar daily fantasy sports industry. Yesterday, Schneiderman filed for a temporary injunction to shut down industry leaders DraftKings and FanDuel, arguing that they facilitate illegal gambling.

Target posted third-quarter results that matched analysts’ estimates and raised the low end of its annual profit forecast, citing strength in health products and children’s apparel.

Lowe’s, the second-largest home-improvement chain, reported a 5% rise in quarterly sales, thanks to a robust housing recovery. Net income climbed to $736 million, or 80 cents a share, from $585 million, or 59 cents a share.

Reuters has published an excellent examination of stock buybacks and the results are pretty incredible. In fiscal 2014, among the 3,297 US companies examined, spending on buybacks and dividends surpassed the companies’ combined net income. In the most recent reporting year, share purchases reached a record $520 billion. Throw in the most recent year’s $365 billion in dividends, and the total amount returned to shareholders reaches $885 billion, more than the companies’ combined net income of $847 billion.

The phenomenon is the result of several converging forces: pressure from activist shareholders; executive compensation programs that tie pay to per-share earnings and share prices that buybacks can boost; increased global competition; and fear of making long-term bets on products and services that may not pay off.

Because buybacks increase demand and reduce supply for a company’s shares, they tend to increase the share price, at least in the short-term. By decreasing the number of shares outstanding, they also increase earnings per share, even when total net income is flat. If those buybacks come at the expense of innovation, short-term gains in shareholder wealth could harm long-term competitiveness.

Share repurchases have helped the stock market climb to records from the depths of the financial crisis, but many argue that the records have come at the expense of workers by cutting into the capital spending that supports long-term growth – and jobs. Further, because most most U.S. stock is held by the wealthiest Americans, workers haven’t benefited equally from rising share prices. The U.S. economy is now twice as rich in real terms as it was 40 years ago, but most people feel poorer.

This has been by far the hottest year on record. Last month was the hottest October in 136 years of data, making it the eighth record-breaking month so far in this record-breaking year. This week the El Nino weather pattern started setting records of its own, with some of the warmest weekly temperatures ever seen across large parts of the equatorial Pacific.

Last month wasn’t just the hottest October on record, it was the biggest departure from normal for any month in the past 136 years, according to data from the National Oceanic and Atmospheric Administration. Nice little planet you have here. Shame if something happened to it.

Internet Is Inherently Unstable. Move Along - Financial Review

Move Along

Financial Review by Sinclair Noe

Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)

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DOW + 33 = 17,548
SPX + 4 = 2051
NAS + 12 = 4922
10 YR YLD + .06 = 2.30%
OIL – .07 = 52.71
GOLD + 1.30 = 1160.30
SILV + .27 = 15.49

The major stock indices finished well off the highs for the day but still in positive territory. The New York Stock Exchange was open for business today, following a 3.5 hour shutdown yesterday. While yesterday’s outage stopped trading at the New York Stock Exchange, shares listed on that exchange continued to trade on other venues such as the Nasdaq Stock Market and Bats Global Markets. NYSE officials blame the halt in trading on a software update that didn’t work out. And they say it was just coincidental that United Airlines had computer problems that grounded flights for 2 hours.

And it just coincidental that the Wall Street Journal Website went down just before trading was halted. And it was just coincidental that the ZeroHedge website went down just before trading halted. And it was just coincidental 12 hours before the shutdown, the hacktivist group Anonymous sent a Tweet saying, “Wonder if tomorrow is going to be bad for Wall Street…. we can only hope.” And it was just coincidental that China’s stock market was going through its own meltdown, though much more fundamental in nature; and the Chinese were more than a little miffed at media coverage of their markets. Just a coincidence. Nothing to see here. Move along.

Remember the OPM hack? About a month ago, we heard the Office of Personnel Management had been hacked. The OPM is like the human resources department for the government. The first reports said the hackers gained access to files on 4 million people; that estimate was then raised to 18 million. Now the OPM says the hacks may have compromised the data of 32 million current, former and prospective federal employees.

The US Department of Agriculture’s home page and other parts of its website suffered an outage this morning, as several of the agency’s sites displayed an Error 404 message. The USDA restored access to its site after it was down for at least 30 minutes.

Maybe it’s just a big coincidence or maybe the internet is inherently unstable and we have substantially under-invested in key digital infrastructure. Move along.

China’s benchmark stock index bounced back today, posting the biggest gain since 2009 in volatile trading as the government intervened to stop the bleeding in a market that lost $3.9 trillion in less than a month. The Shanghai Composite Index jumped 5.8 percent to 3,709.33 at the close, erasing a loss of much as 3.8 percent. More than 1,400 companies voluntarily halted trading in their shares locking sellers out of 50 percent of the market. The government followed up by banning large shareholders with stakes of more than 5% in a company from selling stock over the next 6 months, and vowed to “punch back” against illegal market activities by investigating “malicious short selling.” Government regulators also ordered listed companies, state-owned enterprises, and their employees to buy stocks. And that is how they deal with a bear market in China. Time will tell if it works or not. Shenzhen +4.3%; ChiNext +3%.

Greece has a plan. According to a tweet from the spokesman for Eurogroup president Jeroen Dijsselbloem, a new Greek bailout proposal has been received. Greece is asking for a new three-year bailout from its Eurozone creditors. Greece’s stock exchange will also remain closed until July 13, after authorities decided to extend a bank holiday and capital controls. Greece has a debt payment due Monday, and about $4 billion due before the end of the month. They don’t have the money to pay. US Treasury secretary Jack Lew and International Monetary Fund chief Christine Lagarde put pressure on the EU to grant Greece debt relief and help it avoid a Grexit. Both implicitly urged Germany and others to drop their refusal to clear Greek debts, saying the country was in desperate need of a “restructuring”.

Desperate doesn’t begin to describe it. As Greece hurtles toward a Sunday deadline for either reaching a bailout deal or risking a hasty exit from the Eurozone, the one certainty is that its economy is already on the brink of collapse. Greece already has a humanitarian crisis, and default would be ugly, but a deal wouldn’t clean everything up, either. Even though Greece represents just 2 percent of the Eurozone economy, the implications of a country falling out of the euro currency union could be unpredictable, especially if it occurs at the same time as the steep decline in the Chinese stock market.

Betting against stocks has been a losing strategy since 2009 as the Standard & Poor’s 500 Index rallied more than 200 percent and all but 22 members climbed. Going short has been like going against the flow, until the past month or so. With stocks in China plunging more than 30 percent over four weeks and aid talks between Greece and its creditors breaking down, bears are perking up. The number of shorted shares increased 3.3 percent from a month ago to 16.2 billion in June, the most since September 2008

The IMF cut its forecast for global growth this year, citing a weaker first quarter in the US and warning that financial-market turbulence from China to Greece clouds the outlook. The world economy is now projected to grow 3.3 percent in 2015, less than the 3.5 percent pace projected in April and slower than the 3.4 percent expansion last year. Much of the global downgrade was driven by the U.S., which the fund now sees growing 2.5 percent this year, compared with 3.1 percent in April. The IMF this week reiterated its recommendation that the Federal Reserve hold off raising interest rates until the first half of next year, when wage and price inflation are expected to pick up.

More Americans than forecasted filed for unemployment benefits last week, representing a pause in the pace of labor-market improvement. Jobless claims climbed by 15,000 to 297,000 in the week ended July 4, the highest since February. Applications for benefits have been below 300,000 for 18 straight weeks.

IBM has announced a new kind of ultra-dense chip, which squeezes in four times as much computing power as the best silicon currently available. The new chips will usher in the possibility of creating 7-nanometer transistors (a strand of DNA in comparison measures 2.5 nanometers in diameter). IBM made the research advance by using silicon-germanium instead of pure silicon; and a new way to etch the chips, called extreme ultraviolet lithography. According to IBM, this could lead to a 50% performance and power boost over chips that are on the market today, effectively keeping Moore’s Law more or less intact for the time being.

Coty has sealed a deal to buy Procter & Gamble’s beauty business, which includes brands such as Clairol and Wella, in a $12.5 billion transaction that will make the perfume maker one of the world’s largest beauty companies. P&G will separate 43 of its cosmetics, fragrance and haircare brands and fold them into Coty under a “Reverse Morris Trust” transaction that will ultimately give P&G shareholders a majority stake in the new entity.

Charter Communications may be hitting the high-grade debt market tomorrow with a multibillion-dollar M&A bond for its Time Warner Cable acquisition. Charter’s issuance is still dependent on conditions – which have been shaky recently due to Greece and China weighing heavily on investors’ minds. “The investment-grade (portion) is expected tomorrow, the high-yield maybe next week,” said a source, stating the funding plan would likely come to $31 billion.

Honda is recalling  another 4.5 million vehicles worldwide due to faulty Takata air bags, bringing the total number of “Takata plagued” cars recalled by Honda to around 24.5 million. Separately, Nissan disclosed its first Japanese injury related to defective Takata inflators.

General Motors is also recalling nearly 200-thousand older model Hummer SUVs to fix problems that have led to three people being burned. GM shed the Hummer brand in 2009 when it underwent restructuring and a government-sponsored bankruptcy. In a separate recall, 50-thousand newer model Chevrolet Sparks will be recalled because of a software problem that may cause safety warnings not to work.

ExxonMobil knew as early as 1981 of climate change, seven years before it became a public issue, according to a newly discovered email from one of the firm’s own scientists. Despite this the firm spent millions over the next 27 years to promote climate denial.

The email from Exxon’s in-house climate expert provides evidence the company was aware of the connection between fossil fuels and climate change, and the potential for carbon-cutting regulations that could hurt its bottom line, over a generation ago – factoring that knowledge into its decision about an enormous gas field in south-east Asia. The field, off the coast of Indonesia, would have been the single largest source of global warming pollution at the time.

However, Exxon’s public position was marked by continued refusal to acknowledge the dangers of climate change, even in response to appeals from the Rockefellers, its founding family, and its continued financial support for climate denial. Over the years, Exxon spent more than $30 million on thinktanks and researchers that promoted climate denial. Asked about Bernstein’s comments, Exxon said climate science in the early 1980s was at a preliminary stage, but the company now saw climate change as a risk, and they no long fund climate denial groups.

Farm land is incredibly productive. You wouldn’t leave farmland idle unless something really bad happens. California has been experiencing a really bad drought, as you know; and as a result, the University of California Davis estimates 564,000 acres have been fallowed. Unused land, of course, triggers lower agricultural output. Based on estimates of 564,000 idled acres, farm revenue losses are forecast at $1.8 billion, and 8,550 fewer farm jobs because of the drought. And then there is a ripple effect: food processors cut production and jobs, transportation companies fire truck drivers. You get the idea. Spillover, statewide revenue losses are likely to reach $2.7 billion with 18,600 lost full-time and part-time jobs. A separate June report from the US Department of Agriculture says it could be worse; they estimate the total acreage idled to be closer to 900,000.

Financial Review

Goodnight and Good Luck

Sinclair Noe — February 11, 2015  

 

Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)

DOW – 6 = 17,862
SPX – .06 = 2068
NAS + 13 = 4801
10 YR YLD un = 1.98%
OIL – .75 = 49.27

President Obama has asked Congress for formal authorization to fight the Islamic State that would prohibit the use of “enduring offensive ground forces” and limit engagement to three years. The proposed resolution says Islamic State “has committed despicable acts of violence and mass execution.” Its militants have killed thousands of civilians while seizing territory in Iraq and Syria in an attempt to establish a hub of jihadism in the heart of the Arab world. Don’t expect a quick vote by Congress, maybe something in March, maybe just more talk.

We keep hearing that ISIS is growing, and one way they recruit jihadists to their cause is through slick websites and social media. So, you might be wondering why the government doesn’t just close down those sites. I don’t know, but today, the hacktivist group Anonymous has launched a massive cyber-attack against ISIS. A list of more than hundred Twitter and Facebook accounts suspected to belong to Islamic militants has been released by Anonymous. Twitter has already suspended more than 1500 ISIS accounts since the group released the first list in June, 2014 and dozens of militant recruiting websites were knocked offline using collective DDoS Attack. Thousands of Twitter accounts associated with ISIS are still active and spreading jihadist propaganda, but Anonymous says this is just the beginning.

The federal government ran a bigger deficit in January, pushing the imbalance so far this budget year up 6.2% from the same period a year ago.  The Treasury Department said the deficit for January stood at $17 billion compared to $10 billion a year ago.

Home prices moved higher across most of the country. According to the National Association of Realtors, the median price of an existing single-family home rose in the 4^th quarter from a year earlier in 86% of the 175 metropolitan areas measured. Twenty-four areas had price gains of 10% or more, up from 16 regions in the third quarter. Prices declined in 24 areas. The median was $208,700, up 6% from the fourth quarter of 2013. NAR reports Phoenix home prices increased 3.9% over the past year to a median price just over $200,000.

Finance ministers from across the Eurozone have gathered in Brussels today to try to figure out what to do about Greece. The newly elected Greek government is looking for relief from austerity measures. Those restrictions were a condition of Greece’s being granted a total of 240 billion euros, or about $272 billion, in loans from its European neighbors and the International Monetary Fund since 2010. Greece still needs to receive its next loan installment, €7.2 billion, or otherwise bridge the financial gap, to keep from defaulting on its international debt payments in coming months.

Reckless lending and reckless borrowing went hand in hand in the years leading up to the euro crisis. Greek officials did indeed use financial tricks developed by Wall Street to mask the size of budget deficits. Still, even before Greece joined the eurozone, it was clearly living far beyond its means. International lenders knew or should have known this; they were not defrauded so much as willfully blind.  The bailout of Greece was not a rescue of the country, but rather a rescue of the creditors; it was a bank bailout. The Greek government only received 11% of the bailout money to date; the rest went to creditors, or who knows where.

Greece now has more debt than it can ever repay, and lenders share some of the blame for this.  Spending cuts have only resulted in destroying the economy. The Greeks understand; that’s why they voted for Syriza; that’s why there are tens of thousands of Greeks protesting in the streets of Athens today. Unlike many countries, the protestors are not protesting against their government, they are protesting for their government to fight against the creditors. At some point the Euro Union will have to let Greece out of debtors’ prison. At a certain point you have to stop squeezing countries that are in the depths of a depression. And ultimately, some form of forgiveness benefits creditors as much as it helps debtors. Greece is well past the point where debt forgiveness could be considered reward for bad behavior.

By the way, the finance minister for Greece, Yannis Varoufakis, considered by some to be a bit radical, but also well known for research in game theory. So, how about a little game of chicken? Good luck.

Ten U.S. states have sent a letter to Anthem complaining that the company has been too slow in alerting clients that they were victims of a massive data breach disclosed last week and claiming the health insurer should commit to reimbursing customers for losses during the lag time.

The FBI is examining how fraudulent tax returns were filed in 19 states through Intuit’s tax-preparation software TurboTax and whether a computer data breach allowed access to personal information. Intuit halted e-filings of state returns last Friday after spotting criminal attempts to get refunds through its systems, but resumed filing after steps were taken to combat the activity.

A federal judge has approved the IRS issuing summonses requiring certain companies to hand over information about US taxpayers who used Sovereign Management and Legal for offshore accounts. The companies include FedEx, DHL, UPS, Western Union, The Federal Reserve Bank of New York, and HSBC. This could get interesting.

Apple has plenty of cash on the books, but they want more; so, they’re issuing Swiss bonds. For Apple, the lure of issuing in Swiss francs is clear: Swiss government yields are negative as far out as 2027, with its 10-year government bond yielding negative 0.09%. Apple’s strong brand and high credit ratings—Aa1 from Moody’s Investors Service and AA+ from Standard & Poor’s—should make it an attractive proposition for yield-starved investors who have Swiss currency to put to work. That will make any funding ultracheap.

What will Apple do with the extra cash? Activist investor Carl Icahn has a suggestion: more dividend dollars and a few less Apple shares. This is a common theme on Wall Street; according to the Academic-Industry Research Network. Over the past decade, the companies that make up the S&P 500 have spent an astounding 54% of profits on stock buybacks. Last year alone, U.S. corporations spent about $700 billion, or roughly 4% of GDP, to prop up their share prices by repurchasing their own stock. Last year’s buybacks were about 3.3% of market capitalization. Since 2004, stock buybacks totaled $6.9 trillion, and that must surely skew our understanding of earnings.

Apple, which began playing with a record valuation of $700B during midday trading in November, ended the day yesterday at $710 billion. The landmark comes just two weeks after Apple posted the largest quarterly net income of any public company in history. Apple will also be launching a new energy project, partnering with First Solar on an $850M solar farm in California.
The deal will supply enough electricity to power all of Apple’s California stores, offices, headquarters and a data center. Apple will get 130 megawatts, enough to power 60,000 California homes. It’s the biggest-ever solar procurement deal for a company that isn’t a utility, and it nearly triples Apple’s stake in solar.

But it’s not the biggest solar project in California, not by a long shot.

Nearly 4,000 acres of desert near Desert Center California have been converted into a massive solar farm. The Desert Sunlight Solar Farm has been running since December and it was officially dedicated on Monday. The 550-megawatt farm is the largest on public lands managed by the federal Bureau of Land Management. It will provide enough energy to power more than 160,000 average California homes annually. Desert Sunlight was developed by First Solar of Tempe.

First Solar received $1.46 billion from the U.S. Department of Energy, a partial loan guarantee funded by a group of private investors, to finance the project. Pacific Gas & Electric Company and Southern California Edison already have agreed to purchase power from Desert Sunlight for the next two decades.
Before 2009 no solar projects had been permitted on public land. Today, there are 29 permitted commercial-scale solar projects throughout the Southwest. Desert Sunlight is the sixth solar project to come online, and eight more are under construction.

Desert Sunlight is the world’s largest solar power plant, but just slightly. The Topaz solar project in San Luis Obispo County, Calif. — which, like Desert Sunlight, was built by Arizona-based First Solar — also has a capacity of 550 megawatts. But the desert has more abundant sunlight than San Luis Obispo County, so Desert Sunlight will actually generate more electricity than Topaz.

It’s an open question, though, whether future solar projects will be anywhere near as big as Desert Sunlight. Developers have been gravitating toward smaller solar farms, which are easier to build and usually have a smaller environmental impact.

One major obstacle for solar development has been the looming expiration of a 30% federal investment tax credit, which is scheduled to fall to 10% at the end of 2016. Another challenge for solar energy developers is that California and other states are already on track to meet increased requirements for renewable energy generation. But the outlook may be more positive after Gov. Jerry Brown in his inaugural speech last month called for half of the state’s power to come from renewable sources by 2030, up from the previous goal of 33% by 2020.

And finally, the Powerball lottery is up to almost $500 million, making it one of the top payouts ever. Actually, the cash payout would be about $370 million, and then you would have to cut taxes out of that. Still, you would be left with a healthy sum. Playing the lottery is a long shot, and it really doesn’t make much sense. But if you are going to play, might as well play when the payout is big. And for a couple of bucks, you can enjoy your own personal fantasy of how you might spend those millions; that’s got to be worth something. Your odds are 175-million to one. If you buy 2 tickets, each ticket will still be 175-million to one odds. It’s a bad bet. Good Luck.