Some points to clarify.
-Buying paper from the finance arms of these companies should neither be surprising nor blasphemous. Nor is it a loan. Its a purchase at a price that is not really market (i.e.: profit) driven. It is unlikely that private investors would have paid the price that the Fed did.
-The part about loaning money to investors who bought CDOs is actually a loan (probably something like a repurchase agreement), where the bond collateralizes the loan. Again the Fed put up more loan money for the collateral than a private entity would have, all else equal.
-The Fed did a lot of this as part of their first Quantitative Easing program. The objective was to drive down credit spreads (difference between consumer borrowing rates and Treasuries) in an attempt to unclog the financial markets and the economy. Largely, it worked, as credit spreads collapsed. That the economy is still weak is more a sign of how bad it would have been had the Fed sat idly by.
-They bought tons of stuff. Commercial paper, agencies, non agency MBS, you name it. Did various companies benefit? Yes. But that is only because lots of companies benefited because the economy did not dive off a cliff.
-You might as well write the same article about GE, for example....
EDIT: One more thing. Calling it secret is flat out wrong. There is nothing secret about it. All this stuff was announced. Just because the masses aren't smart enough to figure it out does not make it a secret.
EDIT 2: I love you, dear slobbering Masses.
