On requiring loan originators keep some of their investment instead of selling it all off:
“If I make a 10-year loan and there is no profit upfront, I had better make a good loan,” says Penner. “And I better hang out for most of the next 10 years, so that I can get paid for doing my job well. Then you will see discipline in lending.”On unrealistic returns for real estate:
“The desire to get a real estate return in the high teens or 20% is piggish. It’s unrealistic,” insists Penner. “For investment managers to reach that kind of yield, they have to take undue risks, mostly in the form of extraordinarily high leverage, or development with crazy pro forma numbers.”The whole article is good, I suggest you read it if you are into that sort of stuff (economics, capital markets, devastating financial collapses). A lot of it is stuff that was in the news more a year or two, but that doesn't make it uninteresting or mean the issue aren't still in need of attention.