This New York Times column by former investment banker William Cohan is very interesting reading.

The Fed’s actions may have saved some jobs at struggling fast-food chains and cruise ship operators, but they are also warping the financial markets, just as they did in the aftermath of the 2008 financial crisis. By buying junk bonds, the Fed has created a proverbial “moral hazard” for those investors whose risk-taking had gotten out of control but now may not face the consequences for their profligacy.

This problem is revealed most clearly in a spat that has pitted one group of billionaire investors against another. On one side are private-equity firms including Apollo Global Management and the Carlyle Group, which want some of the Paycheck Protection Program bounty for their struggling, overleveraged portfolio companies. . . . . On the other side are people like Howard Marks. He is the co-founder of Oaktree Capital Management, one of the largest investors in distressed securities in the world. He made his billions betting that markets will act rationally in challenging times. In recent years, he has been warning that overleveraged companies will fail and that overpriced bonds will return to earth.

In an April 14 letter to his investors, Mr. Marks expressed his ire about the Fed’s moves that rescued such companies. “Capitalism without bankruptcy is like Catholicism without hell,” he wrote, recalling an old Wall Street truism. “Markets work best when participants have a healthy fear of loss. It shouldn’t be the role of the Fed or the government to eradicate it.”