Which way for Royal Mail?

It would be a brave of the government to force through the generally unpopular part privatisation of Royal Mail. It wouldn't exactly be a morale or confidence building move in the current climate. However whatever the recent profitabilty of the company it all looks miniscule compared to the pension hole that sits behind the company (as Lord Mandelson has pointed out). Buying into a company with a £6-12 billion pension deficit would be a brave move with current profits.

And any suitors from within the mail sector will also be feeling the cold wind that has blown through the direct mail world over the past 9 months. Volumes are down and many are suffering.  Despite the undoubted ability of Lord Mandelson to create the future that he seeks it's difficult to see a deal that would give equal weight to the needs of all stakeholders; Mailers, employess and shareholders. It would be a tragedy if the market lost diversity but equally employees who have worked all their lives for pension entitlements need to have their expectations met.

Why Michael O'Leary is right (this once)

It's not often that I agree with Michael O'Leary but in a recent Sunday Times article on the economic gloom in Ireland (yes folks, it's worse than here) he is quoted as saying:

"This recession is fantastic. After 10 years of lunacy in this country it's absolutely necessary. Now we can start again and do things properly. There's never been more opportunity. Interest rates have never been lower. Oil is cheap. There's no pressure on wages. This is the time when good businesses start up, grow up and gear up for the next 5 or 6 years of growth."

Whilst some aspects of his words might grate the truth is that a recession can indeed be a fertile time. The sainted Warren Buffet phrased it well when he said "Be fearful when others are greedy. Be greedy when others are fearful". But then again he's had a bit of a haircut recently.

The challenge is to know which businesses will prosper and which sectors will grow. In the world of DM this can translate in to businesses that use DM or businesses that propser from supplying services. Rememeber, what we now know as Proximity, but was then Barraclough Hall Woolston Gray, was founded in 1991. At the same time that Norman Lamont claimed to see "green shoots of recovery". Lamont might have been misguided and didn't last the course but Simon Hall et al clearly weren't.