Is Buffett right about BNY Mellon (BK)?
I think Buffett buys BNY Mellon because it offers enormous amounts of cash and value for a cheap price.
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Market Mad House
In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche
BNY Mellon
What BNY Mellon can tell us about the Economy
I think the hedge fund managers are buying BNY Mellon because they want companies with lots of cash. I suspect hedge fund bosses want cash-rich companies because they think a market correction or market turbulence is imminent.
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BNY Mellon eyes a $20 Billion Cryptocurrency Market
The hope is to offer cold storage for up to $20 billion worth of cryptocurrency. Cryptocurrency exchanges and brokers want cold storage because custodians would take the problems and liabilities associated with storage.
For example, many exchanges and brokers have a hard time getting insurance for stored assets. However, established custodians like BNY Mellon already have such insurance.
On the positive side, all that is standing between companies and BNY Mellon and cryptocurrency storage is SEC approval. On the negative side, the cryptocurrency market has dropped dramatically in recent weeks losing up to 80% of its value.
The cryptocurrency market is certainly huge, BNY Mellon estimates that there are 1,000 cryptocurrencies with a market capitalization of $400 billion. On the other hand, US equities have a market capitalization of $25 trillion.
Therefore, cryptocurrency is a small portion of the global economy. However, cryptocurrency is growing fast.
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Is BNY Mellon Making Money?
Obviously a lot of people will be scared by the USC, because it sounds as if the bankers know something about the world’s financial system we do not. One cynical view might be that bankers fear the current system might collapse so they are quietly building an alternative.
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An Interesting Speculative Play in Finance at BNY Mellon
Beyond the potential repatriations windfall, there is something else really fascinating about Bank of New York Mellon (BNY) – it is a potential cryptocurrency play. Mellon has been actively researching and experimenting with blockchain and altcoins; while finance industry leaders have been badmouthing them.
BNY Mellon is listed as one of the participants in the Ethereum Enterprise Alliance (EEA).
To add icing to the cake, BNY Mellon is also participating in the Linux Foundation’s Hyperledger Project.
The Value in Finance Bank of New York Mellon
Trump has proposed a tax holiday to let companies bring the money back, something that might be politically impossible to sell to Congress. Although a Republican Congress did give President George W. Bush a tax holiday in 2004 when two thirds of the earnings were repatriated, Wells noted.
If such a holiday were to occur; and it is a big if, a lot of the money would come through BNY Mellon. CNBC estimated that companies would bring $1.7 trillion back to the U.S. That might generate fees for Bank of New York which moves funds for big companies.
Such a holiday might be unlikely now because few Congressmen or Senators would want to be seen giving big corporations a huge tax break in today’s political climate. Hostility to Wall Street and big business is running high and destroying the careers of politicians seen as puppets of moneyed interest such as Hillary Clinton.
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Is Bank of New York Mellon the best Value in FinTech?
Bank of New York Mellon is not just a bank with offices in Manhattan it is a FinTech play. BNY Mellon is one of four major banks developing the Utility Settlement Coin or USC, with the technology companies Icap and Clearmatics, Crowdfund Insider reported.
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