Not content with merely throwing money at the automakers, the Fed has new plans to become the world's largest auto dealership. Details of the plan were buried in this announcement: Fed Opens TALF Loans to All Borrowers, Extends Term.



The Federal Reserve revised its $200 billion program aimed at reviving credit to consumers and small businesses, extending the term of loans to three years from one year.



Under the Term Asset-Backed Securities Loan Facility, or TALF, the Fed will also loan to all eligible borrowers rather than through an auction process, the central bank said today in a statement in Washington. The change is designed “to provide more certain investor access,” the Fed said.



The central bank pledged Dec. 16 to “employ all available tools” to restore economic growth, including the TALF and other emergency lending. The Fed has already expanded its balance sheet to a record $2.3 trillion to stem the worst credit crisis in seven decades.



Under the TALF, the Fed will lend to holders of AAA-rated asset-backed securities backed by “newly and recently originated” loans. Those loans include education, car and credit-card loans, and borrowing guaranteed by the Small Business Administration. The Fed intends to have the TALF running by February.



The Fed said that it would accept securitized auto credits, including leases and auto dealer floor plan loans.

Hundreds Of Auto Dealers Will Fail

Sea of Unwanted Imports





Above: A lot at the Port of Long Beach used to park cars. Click here for more Pileup Photos.



Gleaming new Mercedes cars roll one by one out of a huge container ship here and onto a pier. Ordinarily the cars would be loaded on trucks within hours, destined for dealerships around the country. But these are not ordinary times.



For now, the port itself is the destination. Unwelcome by dealers and buyers, thousands of cars worth tens of millions of dollars are being warehoused on increasingly crowded port property.



And for the first time, Mercedes-Benz, Toyota, and Nissan have each asked to lease space from the port for these orphan vehicles. They are turning dozens of acres of the nation’s second-largest container port into a parking lot, creating a vivid picture of a paralyzed auto business and an economy in peril.



“This is one way to look at the economy,” Art Wong, a spokesman for the port, said of the cars. “And it scares you to death.” “We’re supposed to move things, not store them,” Mr. Wong said.



Kurt Golledge, 48, was one of just two truckers loading his green, 75-foot-long hauler with cars last week. Mr. Golledge said eight of his colleagues were laid off this month because Toyota dealers did not want more deliveries.



“I was dropping cars in Henderson, Nev., about a month ago and the dealer told me: ‘Take ’em somewhere else and dump ’em,’ ” said Mr. Golledge, who works for a company called Allied Systems. “All the dealers are telling us the same thing.”



“The ships keep coming, but there’s nowhere for the cars to go,” Mr. Golledge said. He said he believed the vehicles he was loading would be his last before he was laid off, and he was already considering where he might find a new job.

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