Morning Money Memo…

Auto sales are booming with a strong pick-up in demand for light trucks and SUVs.

"September was another strong month," said Karl Brauer, senior analyst at Kelley Blue Book. "The market continues to embrace trucks and SUVs at every price point, with premium brands also benefitting from a combination of fresh product and readily-available credit."

Financing is cheap and much more widely available than right after the 2008 financial crisis, "with a significant extension of subprime lending," said Mark Strand at AutoTrader.com. "These tailwinds have created an environment in which all the pent up demand we have talked about can be released."

Liars, Beware

Government prosecutors are looking into liar loans, where borrowers' incomes are inflated to enable them to qualify for high interest auto loans.

"Federal and state authorities, a group that includes prosecutors in New York, Alabama and Texas, are zeroing in on the most powerful, and arguably the least regulated, rung of the subprime auto loan chain, used-car dealerships, according to people briefed on the investigations," reported The New York Times. "Already, they have found hundreds of fraudulent loans that together total millions of dollars."

Money Flows Out After 'Bond King' Leaves

Record amounts of cash followed "bond king" Bill Gross out the door. Investors pulled $23.5 billion from Pimco's flagship, Total Return bond fund, after he abruptly left the company last month. The fund lost more than 10 percent of its asserts after Gross departed for rival Janus Capital. The fund also lost money before Gross quit, and Pimco has been trying to calm investors.

"The fund is well positioned to meet potential redemptions, and short-term cash management is an area of expertise and strength at Pimco," the company said in a statement.

Some of the money that flowed out of Pimco went to rivals Vanguard, Janus and DoubleLine funds. The big movements are example of the hazards of hiring and keeping star fund managers who have a big following.

Pensions: Just Like Other Debts?

A federal judge has struck a blow against the sanctity of public pensions in California by ruling that U.S. bankruptcy law permits the city of Stockton, California, to treat pension fund obligations like other debts, allowing the city to cut benefits.

Stockton argued that it must make its pension contributions for public employees before its creditors are paid the entire amount they are owned.

The case was being closely watched because it could help clarify who gets paid first by financially strapped cities.

Detroit Bankruptcy

Emergency manager Kevyn Orr is due back on the witness stand in Detroit's multibillion-dollar bankruptcy trial. Testimony is scheduled to resume this morning before federal Judge Steven Rhodes.

A lawyer for the city questioned Orr on Wednesday on the physical condition of the city and its finances when he was hired by the state last year.

Orr has described Detroit as a cash-strapped city with blighted neighborhoods, service delivery problems, old equipment and tons of debt.

Facebook Apologizes

Facebook is apologizing to the LGBT community for a recent crackdown that resulted in the suspension of a number of profiles.

Facebook's VP of product made a statement on the site, saying a single user flagged a number of pages for using fake names. Facebook then suspended the accounts without realizing why they were using fake names.

Facebook apologized to the "affected community of drag queens, drag kings, transgender, and extensive community of our friends, neighbors, and members of the LGBT community."

Members of the Facebook team met with members of the LGBT community Wednesday and promised "more deliberate customer service" in the future.