MORNING YAPS

*Leave it to the government to bail out everyone but the consumer. Get a car/truck today, have it repossed tomorrow, after you just lost your job!
All kidding aside, I have been telling people to buy Ford stock for over a year. How did that work out for me? 240% Return
Ford to record first monthly sales increase since 2007Riding a wave of increasing car sales, fueled by the U.S. government's "cash for clunkers" program, Ford Motor will post its best sales volume since the financial crisis began. Ken Czubay, Ford's sales and marketing chief for the U.S., disclosed the year-on-year gain but did not release specific numbers. The growth includes retail sales to consumers, which are typically more profitable than fleet sales. Bloomberg (03 Aug.)

*are we surprised?
Questions arise as Wall Street profits from trading with Fed
The Federal Reserve has become one of the largest customers of Wall Street banks as it strives to stabilize markets by purchasing securities. The result has been huge profits for the banks, raising questions about how the U.S. government deals with private-sector counterparties. "You can make big money trading with the government," said an executive at an investment-management firm. "The government is a huge buyer and seller, and Wall Street has all the pricing power." Financial Times (tiered subscription model) (02 Aug.)

*I know this investor doesn't question it. Cash out of emerging markets.
Analysts question investor interest in emerging marketsInvestors are seeking hefty returns as they flock to emerging markets, but analysts question whether the performance will continue. In the first half of the year, investors poured more than $12 billion into emerging markets, according to Lipper, a research firm in New York. During the same period of 2008, emerging markets saw a net inflow of $2.5 billion. Jeff Tjornehoj, a senior research analyst at Lipper, said investors are tapping emerging markets because of signs of life emerging within the sector, including a 34.18% gain year to date through the end of June. InvestmentNews (31 Jul.)

*this is very bad for the big elephant in the room that no one wants to talk about: STATES
S&P's downgrade of Ambac ripples through muni-bond market
A downgrade of bond insurer Ambac Assurance by Standard & Poor's caused thousands of municipal bonds to lose their ratings or be downgraded. "It is not a catalyst for a major market shift, but it will reduce the valuation and the liquidity, which will spook retail investors," said Matt Fabian, managing director of Municipal Market Advisors. "You may wind up with a generation of muni bonds with semi-permanent illiquidity." Financial Times (tiered subscription model) (31 Jul.)

*the cascading of CRE begins? h no that's right, IT ALREADY HAS!
REIT share prices challenged by maturing debt, weaker earnings
Share prices for real estate investment trusts have posted spectacular gains in recent months, climbing 60% from their 18-year low in March. But the REIT industry faces some formidable challenges. A mountain of debt is scheduled to mature during the next two years, and refinancing remains extremely difficult to obtain. Rent and occupancy rates continue to decline, undercutting earnings. The Wall Street Journal (03 Aug.)

*noooo...REALLY?
Canada's recovery suffers setback as GDP declines
Canada's GDP slipped 0.5% in May, but economists said the nation still has a good chance of shifting into growth in the third quarter. "The deep decline appears to fly rather rudely in the face of recent chatter that the recession was ending," said Douglas Porter, an economist at BMO Capital Markets. "The Canadian economy will need to crawl out of a deeper hole." The Toronto Star (01 Aug.)