Yes, the Fed printed the money to buy those securities, but it's not like they just printed the money and gave the banks free money. That is exactly what

Yes, the Fed printed the money to buy those securities, but it's not like they just printed the money and gave the banks free money. That is exactly what they did, because otherwise those securities would not have had the same price on an open market. The Fed paid for worthless holdings and propped up banks by printing trillions, thereby devaluing everyone else's dollars. And they are still doing it, now printing $85B per month ($1T/year) to buy mortgage-backed securities and reinflate the housing bubble. Printing $100 to buy $1 of MBS toxic waste from the banks is direct depositing $99 into their pockets (and causing commensurate dilution of all other dollar holders). Overnight loans are almost irrelevant to your point because they're overnight. Without printing $9 trillion to "inject liquidity" the banks would have gone bust when the capital call came. It was this overnight loan that allowed the banks to socialize the losses while privatizing the gains.