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Comment and Analysis in Friday’s FT,

Analysis: America braces itself for a second dip
The economy is in increasing danger of deteriorating again later this year. While there have been occasional glimpses of hope, negative forces intensified over the past two months. A growing number of economists are predicting a “W-shaped” downturn, with some forecasting outright contraction around the turn of the year.

John Eatwell and Avinash Persaud: Fannie and Freddie, damned by a Faustian bargain
The rescue of Fannie Mae and Freddie Mac announced by Henry Paulson, US Treasury secretary, on Monday was the inevitable consequence of the “market-isation” of banking that has transformed central banks from lenders of last resort to buyers of last resort. And unless regulators change track, there will be more rescues to come.

Erik Berglof and Raghuram Rajan: Progress in emerging markets is at risk
The global credit crisis has made the financial sector vulnerable to populist attacks. The greatest casualty may be financial development. The problems in the financial sector in the US allow populists in emerging markets not just to retread their critiques of financial markets but also to hold free enterprise and trade guilty by association.

Lombard: Why a bird in hand has never looked more valuable
Forget traditional deal valuation multiples such as enterprise value to earnings or price to book. Has the ratio of bird-in-hand to bird-in-bush ever looked as high as it does now?

Video: Lombard on Equitable
The parliamentary ombudsman’s report into the Equitable Life calls for compensation for the million policyholders who lost money as the insurer almost collapsed eight years ago. FT Lombard’s Andrew Hill is sceptical whether the government will be willing to make payments and if it does, how quickly they might come.

Insight: Murphy’s law may be apt but need not spell total disaster
Going back to the problems facing Fannie Mae, Freddie Mac, MBIA, Ambac and other financial institutions, there is plenty of evidence now that risks were seen as too unlikely to happen - such as house price falls across the entire US - to be important.

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