Why is the Fed making a ton of short-term loans?

For the past couple of months the Fed has been loaning money to major Wall Street dealers. They did this with a repo (repurchase agreement) loan program when the rate on these loans really jumped from 2 to 10 percent. Last week it announced a more formal program by which it would provide $2.93 trillion.

You may remember that in 2008 the Fed created a very similar lending program. It called it the Single Tranche Open Market Operation (ST OMO) and attempted to pass it off as part of its routine open market operations. But you know what happened.