Heard about the OMG $29 trillion dollar Fed bailout of the U.S. banks? Yes? Congratulations... you've been taken in by yet another conspiracy theory!
The reality is that the Federal Reserve never had $29T outstanding in loans to the banks. During the peak crisis period when the banks could no longer raise money on the open markup due to a complete lockup of equity markets, the peak liquidity lending was about $1.5 trillion, or roughly 6% of outstanding corporate and household debt. The current balance, BTW, is $0 -- that's how much the banks owe the Fed right now, because they repaid everything they were loaned once equity markets unfroze.
Furthermore, this is sort of the purpose of the Federal Reserve, the whole reason it was created -- to provide liquidity by trading cash for long-term assets when there's a bank run. Which there was. The failure of the Federal Reserve to do this job during 1929-1932 is what caused the collapse of over half of the banks in the United States and massive deflation that resulted in over 30% unemployment.
In short, the conspiracy theorists find a conspiracy in the Fed doing its job. Which is just whack. The whole point of the Federal Reserve is to loan money to banks in exchange for long-term assets when the banks need short term cash, otherwise there's no reason to have it. Blasting the Fed for doing what it's supposed to do is either dishonest, idiotic... or both.
-- Badtux the Monetary Penguin