News from around the web: 2009-09-01

Hat tip aitrader. A report that Chinese state-owned companies will be allowed to walk away from loss-making commodity derivative trades provoked anger and dismay among investment bankers on Monday as they feared it may set a damaging precedent.

The software entrepreneur John McAfee, whose fortune has dwindled to about $4 million, from more than $100 million, sold the last of his major real estate holdings on Saturday: a 157-acre spread in Rodeo, N.M., where he and his friends flew lightweight airplanes.

Investors’ hearty appetite for any good economic news is filling the stock market with the equivalent of empty calories. Our pundits say that the economy is indeed improving on a slow and incremental basis, but they also warn that the path to stability and the path to growth are getting conflated in a classic bear market rally.

The act of de-friending someone on Facebook may have just become a bit more socially awkward. There’s now a Greasemonkey add-on (available here) that will check your network at scheduled intervals to see if anyone has removed you and alert you when it happens.

Fannie Mae and Freddie Mac shouldn’t be allowed to languish in Uncle Sam’s arms. But as the anniversary of their seizure by the government approaches, the mortgage financing giants remain the biggest black holes in the financial firmament.

Hat tip Judith: Sammy, another coke dealer, was equally aloof. "On weekends, I was making twenty house calls per night," he says, "And there were always 20 to 25 that got shafted."…For Tim C., a longtime street dealer whose headquarters are in Washington Square Park, the problem has trickled down… "It sucks. You’re gonna find me at the post office if this goes on for much longer." Then the stock market crashed, and people started losing Sammy’s number. But he didn’t lose theirs. "It was a 646 number," says Nate, 26, who works at an investment bank; he got three calls from Sammy in one week.

Throughout the recent stock market rally, I have proclaimed my agnosticism about what might happen next, although I’ve been leaning toward the viewpoint that the government’s money printing may make stocks go higher. Thus, I have not wanted to short stocks…the market might be ripe for a correction. However, being "ripe for" and actually undergoing a correction are two different things. I wouldn’t be the least bit surprised to see some sort of serious pullback. But to repeat, for now I have no interest in trying to capitalize on that from the short side, except perhaps by using a couple of ideas for a bit of insurance.

House prices dropped again in July, extending a slump that has dragged prices to the lowest in more than five years. Prices fell 1.1pc from the previous month and were down 12.5pc from a year earlier, Irish Life & Permanent (IL&P) said in a monthly report today. The annual drop is the biggest since the index began in 1996. House prices have fallen in every month since May 2007 and are now 24pc below their peak in the early part of that year.

Canada’s economy shrank faster than expected in the second quarter and the country’s first recession since 1991 is proving deeper than thought, even as growth in June indicates the contraction is nearing an end.

Goldman Sachs has released a new report on the hedge funds industry, Hedge Fund Monitor… Among the key findings: Net long exposure has increased significantly to the highest since June 08 amidst improving economic data, stabilizing capital markets, and rising equity prices. Hedge funds net long is now 31%, a return to "pre-Lehman" levels.