The loony right (and some on the loony left) have claimed recently that the Federal Reserve has made trillions of dollars of secret loans to banks in the last few years. Fortunately, this has not happened; the Fed has made thousands of overnight billion-dollar loans that everyone knows about.
First, you have to use different rules of math than those of us in the reality-based community to get to the amounts anti-Federal Reserve folks have bandied about recently. Then you have to forget the salient fact that all the loans got paid back:
For example, [Economist James] Felkerson takes the gross new lending under the Term Auction Facility each week from 2007 to 2010 and adds these numbers together to arrive at a cumulative total that comes to $3.8 trillion. To make the number sound big, of course you want to count only the money going out and pay no attention to the rate at which it is coming back in. If instead you were to take the net new lending under the TAF each week over this period—that is, subtract each week's loan repayment from that week's new loan issue—and add those net loan amounts together across all weeks, you would arrive at a cumulative total that equals exactly zero. The number is zero because every loan was repaid, and there are no loans currently outstanding under this program.
But zero isn't quite as fun a number with which to try to rouse the rabble.
In unrelated news, the temperature in Chicago jumped 10°C in the last six hours, so it's time to walk the dog.