Forgive my delay in posting, it seems real-life sometimes gets in the way of blogging.

It seems the cash-strapped Florida legislature is not going to hold a tax-free hurricane preparedness week, as in the pats. The Florida government used to offer a 1 week tax holiday on storm preparedness items, e.g. batteries, flashlights, camp stoves, coolers, etc. would be tax free for 1 week. This could be 6-7% savings depending upon which county one lives in.

Well, now it's time for the state to promote retail sales instead of reducing you tax burden.

May 30, 2008

Contact:

GOVERNOR'S PRESS OFFICE
850-488-5394

ST. PETERSBURG – Governor Charlie Crist today joined state and local emergency managers and the Florida Retail Federation to promote Florida Hurricane Preparedness Week, May 25-31, 2008. He announced that some Florida retailers will be hosting special sales on hurricane supplies, beginning Friday, May 30, and continuing through June 8. Governor Crist and officials also accompanied Sandra Jackson of St. Petersburg and three of her children to shop for hurricane supplies at the Home Depot in St. Petersburg.

“Florida retailers have stepped up to the plate during tough times to help Floridians get ready for this hurricane season,” said Governor Crist. “We applaud their commitment and partnership to the safety of all who call the Sunshine State home.”

The Governor announced that the Florida Lottery and the Florida Retail Federation have partnered with Emergency Management this year to increase public awareness efforts across the state. Emergency supply lists will be available in more than 13,000 Lottery retailers from the Panhandle to the Keys. The Florida Lottery will also work with its existing broadcast media partners to place preparedness messages in both English and Spanish during select television and radio events.

“The Florida Lottery is proud to play a part in preparing Floridians for the upcoming hurricane season,” said Florida Lottery Secretary Leo DiBenigno. “For 20 years, the Lottery has provided billions for education in the Sunshine State, and we are glad to support emergency managers statewide to help raise awareness and keep our residents and visitors safe.”

“Florida is a great place to live, work and play,” said Governor Crist. “However, with this paradise comes the responsibility for all who call the Sunshine State home to get a plan and prepare for the 2008 Hurricane Season.”

Rick McAllister, president and chief executive officer of the Florida Retail Federation, explained how retailers across the state have stocked their shelves with emergency supplies, and they encourage residents to visit stores in their local community to get prepared for the upcoming hurricane season.

“Floridians can use the emergency supply list as they prepare themselves and their families for any type of disaster, especially hurricanes,” said McAllister. “We encourage everyone to check and replenish their emergency supplies so they are ready before an event happens.”

All of the participating Florida retailers are actively engaged in hurricane and disaster preparedness. Some Florida retailers will make special savings available on common disaster-supply items during the 10-day event. Check your local newspapers for the sales and promotional prices that may be taking place in your area.

“All Floridians need to get a plan and prepare to the best of their ability,” said Craig Fugate, director of the Florida Division of Emergency Management. “Residents should stock up on emergency supplies for the hurricane season.”

Some of the items included on the emergency supply list include:
· Flashlights and portable, self-powered light sources
· Portable radios, two-way radios and NOAA weather-band radios
· Flexible waterproof sheeting (tarps)
· Gas or diesel fuel containers
· Batteries
· Medications
· Ice chests or other food storage coolers
· Portable generators
· Carbon monoxide detectors
· Storm shutter devices
· Pet carrier and supplies

Florida Hurricane Preparedness Week is running in conjunction with National Hurricane Preparedness Week activities being conducted across Florida and other coastal states. For more information go to www.FloridaDisaster.org or http://www.nhc.noaa.gov/HAW2/english/intro.shtml. The 2008 Atlantic Hurricane Season runs from June 1 through November 30, 2008.

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This past weekend I attended the Southern Classic Gun show in Miami. One of the lessons learned: shop carefully. Many dealers were asking FAR too much for weapons that were in crappy shape. AK47's going for $700, used Glocks for $500. Just awful stuff.

One nice find was a Ruger Speed Six in good condition for $400, which C, My Favorite Lesbian, got for $375 out the door.

One thing that is interesting is they were selling Mosin-Nagants for the $200 range. After some consideration, I decided to apply for my 03 C&R FFL license, which is $30 for 3 years. Just the savings alone on one Mosin justifies the license cost, and permits the shipping of C&R firearms without needing a an 01 dealer to process it.

Get your own 03 C&R:
http://www.surplusrifle.com/shooting2005/howtogetyourcurionrelicffl03/index.asp

http://www.atf.treas.gov/dcof/index.htm
The form is F7CR 5310.16 Application for License (Collector of Curios and Relics) Under 18 U.S.C. Chapter 44, Firearms

Update: The requested forms arrived in 4 days. I'll update on the processing time once I send them out.

Hoovervilles, already?

This one got forwarded to me by my wife, from CNN:

SANTA BARBARA, California (CNN) -- Barbara Harvey climbs into the back of her small Honda sport utility vehicle and snuggles with her two golden retrievers, her head nestled on a pillow propped against the driver's seat. A former loan processor, the 67-year-old mother of three grown children said she never thought she'd spend her golden years sleeping in her car in a parking lot.

"This is my bed, my dogs," she said. "This is my life in this car right now."

Harvey was forced into homelessness this year after being laid off. She said that three-quarters of her income went to paying rent in Santa Barbara, where the median house in the scenic oceanfront city costs more than $1 million. She lost her condo two months ago and had little savings as backup.

"It went to hell in a handbasket," she said. "I didn't think this would happen to me. It's just something that I don't think that people think is going to happen to them, is what it amounts to. It happens very quickly, too."

Harvey now works part time for $8 an hour, and she draws Social Security to help make ends meet. But she still cannot afford an apartment, and so every night she pulls into a gated parking lot to sleep in her car, along with other women who find themselves in a similar predicament. There are 12 parking lots across Santa Barbara that have been set up to accommodate the growing middle-class homelessness. These lots are believed to be part of the first program of its kind in the United States, according to organizers.

The lots open at 7 p.m. and close at 7 a.m. and are run by New Beginnings Counseling Center, a homeless outreach organization.

It is illegal for people in California to sleep in their cars on streets. New Beginnings worked with the city to allow the parking lots as a safe place for the homeless to sleep in their vehicles without being harassed by people on the streets or ticketed by police.

Harvey stays at the city's only parking lot for women. "This is very safe, and that's why I feel very comfortable," she said.

Nancy Kapp, the New Beginnings parking lot coordinator, said the group began seeing a need for the lots in recent months as California's foreclosure crisis hit the city hard. She said a growing number of senior citizens, women and lower- and middle-class families live on the streets.

"You look around today, and there are so many," said Kapp, who was homeless with her young daughter two decades ago. "I see women sleeping on benches. It's heartbreaking."

She added, "The way the economy is going, it's just amazing the people that are becoming homeless. It's hit the middle class."

She and others with New Beginnings walk the streets looking for people and families sleeping in their cars. The workers inform them about the parking lot program.

New Beginnings screens people to make sure they won't cause trouble. No alcohol or drugs are allowed in the parking lots.

"What we are trying to do is we pull bad apples out, and we put good apples in the parking lots and really help people out," said Shaw Tolley, another coordinator with New Beginnings.

Most of the time, the lots are transition points. New Beginnings works with each person to try to find a more permanent housing solution.

"It saddens me when they live in their vehicles," Tolley said. "It is not the most ideal situation for senior citizens and families, but it is reality."

He added, "We need to engage this problem. This is reality."...

Beating peak oil: the SUV of bikes.

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Show up to work to find yourself out of a job

Yup. The economy is starting to look like this: Employees at Roadhouse grills all over the Southeast showed up for work today to discover they had no jobs, and maybe no final paychecks. The picture included on this post is of a chained up front door to a Roadhouse Grill near where I live (I do not work for Roadhouse). Check out the story from the Palm Beach Post:

Friday, May 16, 2008

WEST PALM BEACH — With the swing of a gavel Tuesday, Roadhouse Grill was gone.

The restaurant doors were chained shut without notice. Employees were left without final paychecks. Assets were abandoned.

It was not how John Metz wanted the deal to go down.

The West Palm Beach turnaround man who bought the beleaguered steakhouse chain last fall was reportedly just two weeks away from a sale that could have paid the rent and kept an estimated 2,000 workers on the payroll.

But lawyers on the case said tighter bankruptcy deadlines and increasingly impatient landlords turned Roadhouse into roadkill.

When a loan to cover unpaid rents fell through, Roadhouse was forced this week to shut down its restaurants and liquidate its assets, Craig Kelley, Roadhouse's West Palm Beach attorney, said Friday.

A few more days could have changed the story.

The fine print of a 3-year-old change in bankruptcy law gave Roadhouse until May 5 - 210 days after it filed for Chapter 11 bankruptcy protection in October - to agree to pay $1.25 million in unpaid rents, Kelley said.

Landlords in six states, including Florida, weren't budging. A U.S. bankruptcy judge gave the company until May 9 to fork over the cash

With that deadline looming, Kelley said a big-money buyer, a publicly traded company he declined to name, was circling, willing to pay an estimated $4 million for the steakhouse.

But now? It's worth zip. Not even the restaurants' equipment and furnishings are valuable enough to auction off.

"The landlords are not going to get paid. They'll get their properties back, but they won't be paid," Kelley said.

Tampa investor MCF Development LLC was going to lend Metz the $1.25 million, but the two couldn't agree on terms in time. The money was waiting in escrow when the judge said time was up, Kelley said.

Without the cash, Roadhouse had to give up the leases and convert to Chapter 7 bankruptcy.

Roadhouse's 21 remaining locations, including restaurants in Delray Beach and Greenacres, were closed overnight after the ruling Tuesday. Employees showed up Wednesday morning to find chains on the doors.

"We had no choice but to close it down immediately," Kelley said. "We had to chain the doors, because if steaks and bottles of booze started walking out the door, Roadhouse's principals would be personally liable."

Boca Raton trustee Robert Furr was appointed to liquidate the company's assets. On Friday, he said he would have to abandon the equipment and furniture left at the 21 restaurants. Auctioneers said they could have brought about $20,000 at each location, but it would have cost more than that to set up the sale, Furr said.

Remaining assets amount to little more than $75,000 in cash, Furr said. That means that it is unlikely the out-of-work employees will ever get their final paychecks.

-----

So I got to talking with my brother, the CPA, about information for this blog. As I write, I'm perusing websites on the financial crisis, and I realized I've been focusing on the concrete examples I see daily: the real estate mess, etc. There's a whole shadow financial world that is also in crisis, and the cause is pretty clear. It has nothing at all to do with 0ne given thing, but a perfect storm of problems all peaking at the same time.

I recently stumbled upon a set of videos starring Lindsey Williams and the Energy Non-Crisis. This was shot in 2006, and is quite scary. I'm posting only the first part (of 9) , but you can follow the youtube chain and see the other 8. Good stuff.

Sanford and Son economy: spent brass worth dodging bullets

I'm not the originator of this idea, I'm stealing it from cryptogon.com. The descriptive term "Sanford and Son Economy" is so apt, so perfect for what you're seeing and going to see, it just can't be passed up. So I give credit where it's due, and reserve the right to shamelessly steal the term.

From the AP:

Military cracks down on scrap-metal scavengers

By CHELSEA J. CARTER – 3 days ago

TWENTYNINE PALMS, Calif. (AP) — Hundreds of Marines were conducting a combat training mission in the Mojave Desert when an air patrol spotted something kicking up dust: A civilian pickup truck speeding across the barren landscape.

Behind the wheel was a suspected scrap metal thief who had been combing the Marine Corps Air Ground Combat Center for spent brass shell casings. His intrusion onto the base was the 12th time in six months that scavengers had inadvertently halted combat exercises.

Bombing ranges have become prime hunting grounds for so-called "scrappers," who are motivated by soaring commodity prices to take greater risks in their quest for brass, copper and aluminum. The scavenging causes headaches for the military, which cannot patrol every inch of the remote bases where spent ammunition, shrapnel and unexploded ordnance are easy to find.

"This is not just some petty crime. This is dangerous business," said Andy Chatelin, director of range management at Twentynine Palms, which at 932 square miles is the world's largest Marine Corps base.

Illegal scavenging of military munitions has long been an issue at military bases. But as metal prices have climbed in the past two years, scavengers have become more numerous, more audacious and more sophisticated.

After he was spotted by troops last December, the pickup truck driver barreled directly at a Marine, who fired five shots at the vehicle. The driver swerved, flipped over and spilled hundreds of dollars in collected metal. He was taken by helicopter to a hospital and later charged with attempted murder.

The military loses hundreds of thousands of dollars every time it is forced to halt training. And when scrappers make off with unexploded ordnance, the public is at risk.

The Pentagon estimates up to 10 percent of all ordnance such as bombs, missiles and grenades fails to explode on impact. Some of it is left behind in training areas.

In May 2007, two suspected scrappers removed a Vietnam-era missile from the Twentynine Palms base. It later exploded in their Barstow home, killing both men and destroying the apartment. Earlier this year, two workers were injured at a Raleigh, N.C., recycling plant when ordnance suspected of coming from nearby Fort Bragg exploded.

"The expense we have to go through, not just to guard against the loss of training time, but the chance of this hazardous material getting out into the public, is enormous," said Ronald Pearce, who oversees a training range in Yuma, Ariz., where the Marines and Navy practice aerial assaults. "You just can't look the other way and condone it."

No one knows how much scrap metal lies discarded on U.S. military bases because there are no records of the tonnage of exploded and unexploded ordnance. The number of illegal scavengers is also unclear because the military can only confirm a theft when there is an arrest.

After meeting with the Defense Department last month, the Institute of Scrap Recycling urged its members to stop accepting military scrap without knowing the source of the material. It also recommended the military create a system to account for the material it uses.

The Pentagon said it's impossible to calculate the cost in interrupted training — including lost man-hours and wasted fuel — but they have begun tracking lost training time, which can climb into the hundreds of thousands of dollars.

At the Marine Corps Air Station in Yuma, officials estimated they lost nine hours of aerial training between January and March.

To catch thieves, bases are combining technology with foot patrols and relying on help from sheriff's deputies.

The Twentynine Palms base is using cameras to conduct video surveillance of base borders. It also has assigned Marines from its Special Reaction Team, similar to a SWAT team, to work primarily on nabbing scrappers and trespassers.

But they are often up against a savvy enemy that uses high-tech communications and GPS systems, and often works in teams.

During a recent patrol at the base, Marines hunted for scrappers in gullies, desert washes and mountain crevices where some thieves had previously hid from helicopters under camouflage netting.

Last year, Marines found an abandoned car in the desert and a dead man nearby, plus a second man who was on the brink of death from dehydration. The pair were believed to have been prowling for scrap metal. Similar deaths were reported in Yuma.

The military said most scrappers arrested in the past several years appeared to be either illegal immigrants or drug users looking for easy money. If convicted on federal charges ranging from trespassing to theft, they face up to 20 years in prison.

Because the Twentynine Palms base is so vast, officials cannot erect and maintain fences. Instead, they have posted signs warning against trespassing, only to see those signs stolen for the metal.

"We've seen all types," Sgt. Timothy Warren said as he scanned the mountains with binoculars, looking for scavengers. "We've even arrested one guy, sent him to jail and then arrested him again a few days before he's even gone to court."

Grocery pushback

Part of the solution for surviving the big C is how to feed yourself. I live in a major urban center, and I have no reasonable way to feed myself without the help of the local grocery chains. Groceries are some of the most powerful tools for stretching your deflating dollar and shopping wisely can mean the difference between paying bills and doing without lights.

To that end, I offer the following:

Tips for taming rising grocery prices

By Linda Stern

WASHINGTON (Reuters) - Gasoline isn't the only necessity of life that has gotten painfully expensive. Prices are rising sharply on eggs, rice, poultry, milk and bread -- all of the dietary staples.

Families with stagnant salaries who have been barely affording the rising cost of health care, driving and home heating and cooling now also have to figure out how to squeeze in eating.

And it could get worse before it gets better.

Some say prices of meat, pork and poultry have been held artificially low in recent years. The conversion of fields previously used for soy and feed grain into corn for ethanol will continue to have an impact. Corn, which finds its way into many food items -- as corn syrup for one -- has more than doubled in price the last two years.

But put that all in perspective: Food prices have actually been fairly stable for more than a decade. According to the latest Department of Agriculture figures (from 2006), American households spend less than 6 percent of their income on food -- that's less than in any other country.

Fortunately, there are almost as many ways to save on food as there are to eat. Frugal eating often dovetails with nutritious eating -- the most expensive foods often are the least healthy. Here's how to eat well and still have some money left for dessert.

-- Use the best advice from folks who have already done it. The blogosphere is full of frustrated home economics teachers who are more than happy to share their best frugal tips and recipes. A few places to start are:

here;

www.frugalfamilykitchen.com;

www.mommysavers.com; and

www.cheapcooking.com.

-- Coupon carefully. If you're willing to put in the time and effort, you can buy a basket of groceries for pennies on the dollar. It involves using coupons, shopping sales, finding stores that double coupons and putting it all together carefully. One site to check for more information is www.hotcouponworld.com.

You can find coupons to match items on sale at your local grocer at www.thegrocerygame.com. Beware: Unless you're using good coupons on products you would buy anyway, this can be a spending trap instead of a money-saving deal.

-- Buy some good containers. Roughly 13 cents of every food dollar goes to packaging and advertising, and you'll spend a lot more than that if you are always buying 100-calorie snack packs and tiny bags of chips to send to school with your kids. Buy some reusable containers, buy your favorite products in bulk and make your own individual packages.

-- Use meat for flavor, not bulk. A mixture of meat and beans over pasta or rice will satisfy those who love the taste of meat and poultry, but cut costs significantly than eating large cuts of meat.

-- Make your dollar buy more nutrition. Instead of buying sugar-coated cereals, white bread and chips, buy items like whole-grain bread and oatmeal. Instead of candy, buy fruit. Popcorn that you pop yourself has been heralded for generations for being cheap, fun, nutritious and tasty.

-- Buy frozen fish. Almost all of the "fresh" fish you buy has been frozen and thawed. Fish from the freezer section has often been frozen on the boat, so it's equally fresh -- and cheaper.

-- Do your own work, as a family. You're spending more on labor than on food when you buy lots of presliced, prewashed, preseasoned foods. Yet all the experts seem to agree that family mealtime is an important ritual. Extend the ritual by getting the whole family in on the slicing, dicing, cutting and stirring that dinner requires, even if it's just a once-a-week cooking session. You'll save money and maybe bond a little.

-- Eat out judiciously. Last year restaurant prices actually rose less than grocery prices, but it still costs a lot more to eat out than to cook at home. Americans typically spend about half of their food budget eating out, according to the Agriculture Department. Cut the cost without cutting the fun by mixing it up: Have appetizers and drinks at home before going to the restaurant, or have dessert at home. Or buy a precooked, carry-out chicken, but fix your own side salad.

-- Stock up on sales. You know you're always going to use pasta, lightbulbs and toothpaste, so buy a bunch on sale. Sure, this is inflation mentality, but double-digit price increases on food means we're in an inflationary environment, food wise. Furthermore, if you already have easy, good food in the pantry, you won't have to run out at the last minute and buy over-priced convenience items just to throw together dinner.

-- Grow your own. Oh sure, anyone who's gardened has thrown too much money at their tomato plants. But some crops are more worth growing than others. Basil and other herbs, hot peppers, eggplant and lettuce are some items that are very easy to grow and are never cheap at the grocer or farm stand, even when they are in season.

-- Make it fun. Save with a goal in mind so it becomes a game and not just drudgery. Shave $10 a week off of your food bill (that's less than 10 percent for the typical household), and you can all do something special, like go see a movie at the end of every month -- Of course you'll bring your own snacks.

(Editing by Maureen Bavdek)

Step 6, bank collapse.

Well, the list of indicators of economic collapse trucks right along. Apparently, the regulators are starting to show up at regional banks to keep them from failing.

Federal regulators close Arkansas bank ANB Financial
Friday May 9, 8:45 pm ET ANB Financial banks closed by federal regulators over 'unsafe and unsound' practices

BENTONVILLE, Ark. (AP) -- Federal regulators says they've closed ANB Financial National Association banks after discovering "unsafe and unsound" business practices there.

David Barr, a spokesman for the Federal Deposit Insurance Corp. says many customers served by the bank's nine locations had accounts under $100,000, which will be fully insured by the government. Barr says customers can continue to write checks and draw money from ATMs through the weekend.

Barr says Pulaski Bank and Trust Co. agreed to assume control over ANB Financial's bank locations, which will be open Monday.

As of Jan. 31, federal regulators say ANB Financial had about $2.1 billion in assets and $1.8 billion in total deposits.

It was the third closure this year of an FDIC-insured bank. Douglass National Bank, a Missouri bank with $58.5 million in assets, was shut in January; another Missouri institution with assets of $18.7 million, Hume Bank, was shut down in March.

Both were dwarfed in size of ANB Financial, where regulators found lax lending standards, mostly for construction and development loans for projects in Utah, Idaho and Wyoming, as well as Arkansas.

Observers have been watching for signs of bank distress resulting from the mortgage crisis. Profits at federally insured U.S. banks and thrifts plunged to a 16-year low in the fourth quarter as institutions set aside a record-high amount to cover losses from sour mortgages.

Yup kids, the game is afoot. While ANB hasn't got the name recognition of Bank of America or Citicorp, $2.1 billion is not a small bank. Pulaski, which now controls ANB has assets of only $1.3 Billion. By comparison, Bank of America's assets are $1.7 trillion, Wachovia's are 1.2 Trillion, Citigroup's are $1 trillion. While not a major player, the ANB collapse looks tied to the general meltdown of subprimes. For a state bank, ANB is a major closure.

Why is this happening in Arkansas and Missouri? Unknown at this point, perhaps these are the weak spots.

The human part

So I'm back from FPG, and I'm sunburnt, tired, but refreshed in a significant way: I got to see human beings interacting in an intentional community. Granted, it's a 4-day festival, but it's a campout and a chance to use skills. Also, it's people drawn together twice a year for common interest.

This was my third FPG, and I'm planning the fourth as I write this. It's a low pressure, "luxury" camping trip. IOW, I drive the car in, set up and have access to running water, showers and flush toilets.

For me, it's a time to enjoy camping, survivalism lite. To enjoy the connections to other people in an intentional community. To share without feeling exploited. Festival is like that, and it's an important part of what I believe will be post-collapse society.

Most of us live in a sea of strangers. The majority of folks now live in cities or attached suburbs, and the idea of knowing your neighbors is vanishing. This alienation, this distace, is vastly different from the kind of society humans evolved in - small to medium sized tribes. You knew your neighbor, and he was probably your third cousin. Connection was constant. You knew people would watch your back, and you could trust them not to jack your stuff. Why? Because if your neighbor started walking your dog, everybody knew who's dog it was.

Likewise, human beings need tribes, but the nature of the postmodern world fueled by cheap oil and electronic isolation is subverting that need. People "connect" virtually, but that is a poor substitute for the real thing. In a post peak oil world, it'll just plain cost too much to be so far from your neighbors.

So the alternative is neo-tribalism. A permaculture based economy with the tribe at it's core. Mainly for two reasons: it's more efficient and it solves the needs of people. Many hands making light work. Sustainable agriculture, sustainable building practices and sustainable energy.

The payoff is that people are happier in tribes. Needs get met, and one thing the peak-oil and survivalist crowds aren't big into is the social needs. Tribes are intense, social environments that satisfy so much more than shoppertainment could ever hope to. They are anti-consumerist, and the real solution to the root cause of the angst that plagues the city.

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In a previous post I listed the 12 steps to economic collapse. I stated that we had surely seen steps 1, 2, and 4. What was missing was step 3, and well, we've finally found it. The Fed is allowing banks to put up unsecured debt, car loans, credit cards and student loans, as collateral for borrowing from the Fed. This is a very bad thing.

From the NYTimes:

Fed Takes Steps to Add Liquidity

By STEVEN R. WEISMAN

Published: May 2, 2008

WASHINGTON — The Federal Reserve announced new steps on Friday to help ease tight global credit markets by increasing the size of its cash auctions to banks and allowing financial institutions to put up credit card debt, student loans and car loans as collateral for Fed loans.

The Fed also acted in coordination with central banks in Europe to make it easier for European banks to obtain dollars in currency swaps.

In a terse statement Friday morning, announced just before the government reported that 20,000 jobs were lost in April, the Fed said that it was acting to counter “persistent liquidity pressures” in credit markets in Europe and the United States.

The Fed’s action came as some analysts are saying that a measure of stability has returned to American financial markets after months of turbulence. Nevertheless, the Fed has made clear that it remains concerned about the risk from credit markets seizing up because of losses from bad loans, particularly in the housing sector.

Two days ago, the Fed signaled its continuing concern about the economy, lowering short-term interest rates by a quarter of a percentage point, to 2 percent from 2.25 percent, while signaling that it would not be lowering rates again for a while.

The actions Friday involved two lending facilities set up recently by the Fed to meet the needs of banks, investment banks and other financial institutions hit by the credit crisis after a series of disclosures about the shakiness of their packages of subprime mortgages.

One of these new entities, the Term Securities Lending Facility, can lend up to $200 billion to 20 different banks and investment banks known as “primary dealers.” Until now, the primary dealers could put up mortgage-backed securities as collateral for these Fed loans.

The Fed’s action Friday will allow them to expand the type of collateral that can be pledged to include student loans, car loans, home equity loans and credit card debt, as long as it is highly rated.

In general, dealers have had difficulty obtaining loans with such collateral because such debt cannot be bought and sold in current market conditions, and lenders fear its value is nearly worthless. However, the Fed maintains that the collateral it is now willing to accept will be sound and assessed at a realistic value....