Archive for September, 2005
I often wonder how much healthier everyone would be if every medical discovery (and work in progress) was stored in a big database and freely accessible to any scientist world-wide.
For example, a Montreal Scientist named Bunsen stood up and gave a presentation on his discovery of a vaccine to slow the spread of Aids. In the crowd Beaker — another scientist — who heard this presentation, went back to his lab in the United States, added one molecule of fluorine to Bunsen’s discovery and made it far more potent. Which scientist deserves the recognition? Who should get the profits? Generally, first person who makes it to the patent office gets 100% of any profits. Lets say that Beaker makes MILLIONS from his minor change to Bunsen’s original idea. After this experience, do you think Bunsen will be sharing his research with others in the future?
An article in Fortune magazine is quite interesting and talks about one such scenario. Page two goes on to say:
From 1992 to September 2003, pharmaceutical companies tied up the [U.S.A.] federal courts with 494 patent suits. That’s more than the number filed in the computer hardware, aerospace, defense, and chemical industries combined. Those legal expenses are part of a giant, hidden “drug tax”Ã?a tax that has to be paid by someone. And that someone, as you’ll see below, is you.
To day I was the guest/mark/victim of a Banking Lunch & Learn session thanks(?) to some networking at the last MBA Luncheon.
I decided that I wanted to learn about Bank Service Charges and so directed the conversation. My hypothesis is that the bank in question would remain a profitable corporation if they did not charge service fees on domestic personal accounts.
What do you think?
Here’s what I found out about a “Scotia” type of bank…
their 2004 Annual report states the following:
– Domestic Banking Earnings were 1.136 BILLION DOLLARS (page 19).
– Deposit and Payment Services profited $646 million(i.e. Income from
service Charges on their CONSOLIDATED income statement, page 89)
This was the response from an anonymous bank employee:
I just picked up a copy of the 2004 Annual Report and yes $1.136 billion (pg.19) was the earnings of the domestic banking group. We did collect $646 million in “deposit and payment services,”(pg.86) if we make the assumption that this is 100% service fees then: we collected 18.71% of employee salary/benefits from our clients in service fees, and paid the other 81.29% from other sources (investment income, capital gains, etc.) So assuming that the intent of service charges is to pay for the services provided (to pay salaries and property taxes, utilities, rent, equipment and communications (not including advertising,)) then the service charges fell short to the tune of $ 4.193 billion ($646,000 – $4,839,000)(calculated from info on pg.86).
Furthermore, the bank earned $12.177 billion in interest (on loans and securities) and paid out $6.312 billion in interest to our customers (pg.86).
In the grand scheme customers paid in $646 million and received $6.312 billion, not a bad return. Though of course this is the rich getting richer and the poor getting poorer. ($1 in service fees = $10 in interest.)
Is this really fair? Would society as we know it crumble if Canadians demanded that our banks funded 100% of their services with the profits they make from re-investing our money? Or would customers go crazy in a country of free transactions and overload the banks with trillions of transfers?
Can you believe it? The BBC reports that Swiss Re. (the company that insures the insurance companies) says that world is facing “increasing natural catastrophe events”.
They will be re-adjusting their rates in the upcoming months to reflect this change. Expect your insurance rates to rise before 2006!!!
Read more here under the ‘Increasing catastrophes’ heading.