[TV static drones]
[bright tone]
[upbeat rock music]
♪
[cheers and applause]
- Welcome, welcome, welcome
to "Last Week Tonight."
I'm John Oliver. Thank you
so much for joining us.
And let us begin tonight
with the 2016 election.
Or as you may know it...
[reading onscreen text]
The two candidates have
had a busy week.
First, Hillary Clinton.
Can we talk about
that new hairdo?
No, no, we never, ever can.
She released her tax
returns this week
and had to navigate
the fallout
from the release of State
Department emails,
and yet,
as is always the case,
she was eclipsed by
the imploding star that is
Donald Trump...
[laughter]
the owner of what you might
describe as
"resting rich face."
[laughter]
This was the 53rd
consecutive week
he was going to put
his campaign back on track,
and on Monday,
he gave a big speech
to outline actual details
in his tax policy.
- I am proposing
an across-the-board
income tax reduction,
especially for
middle-income Americans.
This will lead to millions of
new and really good-paying jobs.
- Now, if you're thinking,
"that's the most boring
Donald Trump speech
I've ever seen,"
that might be because
he was reading that script
off a teleprompter,
not talking off
the top of his head.
So it's like watching
a circus seal fold laundry.
That's not the thing
you normally do,
and it can't wait till you
get back to doing the fun stuff.
But to be fair,
his campaign must've been
pleased to
keep him disciplined
and on-message
for an entire hour.
Unfortunately, the rest
of the week quickly devolved,
because the very next day,
he made a chilling suggestion
that second amendment people
could stop Hillary Clinton.
And before people
could even get over that,
he'd moved on to this:
- !sis is honoring
President Obama.
He is the founder of !sis.
He's the founder of !sis.
And I would say the cofounder
would be crooked
Hillary Clinton.
- Wow!
I'll tell you what...
I will give Trump this:
At least he made sure to
include Hillary as co-founder.
[reading onscreen text]
[laughter]
Now, clearly,
what he just said
is absolutely absurd.
But even when people
tried to help him reframe it,
he doubled down.
man: Conservative
radio host Hugh Hewitt
pressed him on that.
[men reading onscreen text]
[laughter]
- He's so insistent!
He's like a guy drowning,
but waving off a lifeboat saying
"get out of here.
I'm very buoyant.
"I'm the most buoyant.
"Everybody talks about
my buoyancy.
I'm a tremendous floater."
[laughter]
Trump was forced to walk
his !sis remarks back on Friday,
tweeting, "ratings challenged
CNN reports so seriously,
that I call President Obama
and Clinton
the founder of !sis."
And then, in all caps:
"They don't get sarcasm."
And yes, sarcasm is
a bullshit excuse.
It's the douchebag's apology.
But at least he defused
the situation,
which is what made it
so much weirder,
when later that same day,
he walked his walk-back back.
- So I said
the founder of !sis--
Obviously, I'm being sarcastic.
Then, then--
But not that sarcastic,
to be honest with you.
- What are you doing?
What are you doing?
You know that riddle
where there are two people,
one who always lies and
one who always tells the truth--
Donald Trump is
both of those at once.
And he had barely put that
whole mess behind him,
when in Pennsylvania, he started
up a whole new controversy.
- The only way we could lose,
in my opinion,
I really mean this,
Pennsylvania,
is if cheating goes on.
I really believe it.
The only way they can beat it,
in my opinion,
and I mean this 100 percent,
if in certain sections
of the state,
they cheat.
- Okay, he "means
it 100 percent."
So by the time this show airs,
he'll presumably have
said he was kidding,
but not, but yes, but not,
but maybe, but not,
but yes, but not,
but maybe.
But what's really worth
taking note of there,
and is worth thinking about,
is that he's suggesting
the election may be stolen
by his opponent.
And that's actually dangerous.
He is priming his supporters
to question the result when
he loses Pennsylvania,
as polls indicate he will,
and as all republican
presidential candidates
have since 1988.
And he's not just
talking the talk here,
he's asking his supporters
to walk the walk.
- His website now has
an application
that you can fill out to be
a Trump election day observer.
- Now, well, you know,
in a way,
we are all Trump
election day observers
because if you look out
of your window in November
and see four horsemen
of the apocalypse,
you'll know, "Oh, shit,
they just called Florida."
[laughter]
But it does seem he actually
wants people to participate.
If you go to his website,
which you absolutely should not,
and try to sign up,
you'll be asked to donate,
which, again,
you absolutely should not do.
Anyone who wants to give their
money to a Manhattan narcissist
whose interests begin and end
with the plight of white people
should keep in mind that
Woody Allen's "Cafe Society"
is getting decent reviews
right now.
[laughter]
Not great, but decent.
It's one of the fine ones.
We wanted to see what
actually signing up involved.
So we signed up without
donating, and received an email
from the campaign, saying...
[reading onscreen text]
Which is troubling because I'm
not sure what Donald Trump knows
what he's legally allowed to do.
His own attorney once
had to apologize for saying,
"You cannot r*pe
your own spouse."
And honestly, I'm surprised
Trump even had an attorney.
I always just presumed
he got legal advice
from a John Grisham
paperback
purchased at a white
supremacist's yard sale.
And remember, this week
was supposed to be all
about his economic plan.
And to be fair, he did
try to get back onto
a focused economic message
on Friday.
It's just, by that point,
the prompters were gone,
and he was back
to doing what he does best.
- I love these boards.
Look, here's a beauty.
I just-- I love charts.
I love them.
And I always said,
you know,
it's too tough
putting a screen up.
You gotta get guys.
It costs too much money.
I don't like to spend money.
This is a cheap version
of a screen, okay?
It's just as good.
But you need good,
strong hands.
So look, you ready?
So there it is.
- That is just magnificent.
So just to recap:
He picks up a chart and says,
"Here's a beauty."
He then utters, with
a straight face, the sentence,
"I love charts."
Before unconvincingly claiming
that only someone with
"big strong hands"
can hold a chart up.
And then turns the chart
back to him, as he's clearly
forgotten whatever
the f*ck is printed on it.
Look, I cannot wait for this
campaign to be over,
but part of me is going
to miss him when he's gone.
So now let's move on
to the Olympics.
The only time trampolining
is considered a sport,
rather than the most
effective way of
breaking a 9-year-old's arm.
The Olympics has featured
stirring performances all week,
but perhaps the boldest
thing I saw
occurred during
a commercial break,
with an ad for API, the American
Petroleum Institute.
They're paying for ads during
the Olympics in certain markets,
and there's something
a little familiar about them.
woman: Who opposes harmful
fuel mandates?
Food producers
and restaurants.
Retailers
and car owners.
And who could pay more at
the pump and grocery store?
You.
Tell Congress you agree.
Fix the harmful
renewable fuel standard.
[laughter]
- Hm. Hm. Okay.
If you're still not
quite seeing it,
perhaps this will help.
♪
You took our shit, API!
You took our shit.
Everything from the font
to the design style.
You have so thoroughly
copied our credits
by the end of that ad,
I was honestly worried I
was about to watch 29 minutes
of a rat-faced Englishman
telling me sad news facts.
And who wants that?
Now, ordinarily,
I would be furious.
but by the look
of API's other ads,
they need all
the help they can get.
woman: We opened this place
to serve fresh food,
sell things like preserves
and local produce,
and offer folks a great
place to catch up.
These days, a lot of that
talk is about fracking.
- Bullshit.
I will bet the conversations
in that shop
are solely about candle making
and the year you spent
in prison for
insider trading,
because you just seem
to be characters
in a Martha Stewart
fever dream.
But somehow,
even stupider
than the coffee shop ad,
is my favorite API commercial,
featuring Rebecca and Andy.
- Energy? Environment?
- Some say it's either/or.
both: I don't buy it.
- We can produce more energy.
- And protect the environment.
man: There's been a lot
of progress.
woman: Put politics aside.
man: Work together.
- And there's a lot
more we can do.
- I'm Rebecca.
- I'm Andy.
- Join us, and become
an energy voter.
- Cool.
[laughter]
There's nothing millennials
like more than bros in hoodies
spitting some real talk on
behalf of the petroleum lobby.
And look, if API is going
to steal our branding,
they're leaving us with no
choice but to steal theirs.
So, please enjoy
the new opening credits
of this show that we
are trying out.
- I'm Rebecca.
- I'm Andy.
- We are young and cool.
- I'm wearing a hoodie.
- Andy's wearing a hoodie.
- I use and enjoy SnapChat.
- And I think Instagram
is #onfleek
both: And you are about to watch
"Last Week Tonight."
- But before you do...
- We just wanted to tell you...
- The American Petroleum
Institute is the f*cking worst.
- The worst.
- f*ck them.
- Hey, Rebecca, did you
know the API spent decades and
millions of dollars supporting
deniers of climate change?
- I did. Did you know they had
research warning them
about a link between fossil
fuels and climate change
as early as 1968?
Maybe that's why their logo
looks like it's being impaled
by a polar bear's d*ck.
- Anyway, enjoy the "Last
Week Tonight" show.
- With John Oliver.
- I'm Rebecca.
- I'm Andy.
both: Go f*ck yourself, API.
[cheering and laughter]
- Moving on.
Our main story tonight
concerns cars.
The muse for America's
greatest songs,
from the complete works
of Bruce Springsteen,
to Tim McGraw's ode
to the American truck.
men: ♪ If you like it up loud
And you're hillbilly proud ♪
♪ Then you know what
I'm talking about ♪
♪ Let me hear you say
Truck yeah ♪
- ♪ Truck yeah!
That song is
un-trucking-believable.
I mean, sure,
it doesn't make sense
they're just driving around
in an empty lot, but it
looks like they're having fun,
So who gives a flying truck?
But America's auto obsession
isn't just a hobby.
Eighty-six percent
of American workers
get to work by automobile.
And the remaining
commute by public
transportation,
walking, or in the case
of that one weird guy
in your office named Nathaniel,
penny-farthing bicycle.
Get down from there.
Stop it.
And if you don't
have a car,
holding down a job can
be a tremendous challenge.
Just watch one woman describe
her daily commute
via public transportation.
woman: I normally get the kids
out on their bus on time.
It's just a matter of whether
or not I make my bus.
This is the first bus,
and then I take two trains
and another bus.
Normally, it takes me
roughly an hour and a half
to two hours
on an average day.
If I were to drive to work,
it takes me maybe 10
or 15 minutes.
- So her commute would be
but without one, she is
literally the length
of the movie "The Imitation
Game" away from her job.
Which is to say, two wasted
hours that feel like forever.
But cars are
obviously expensive.
Which is why many people have to
take out loans to buy them.
Some from places like this...
man: Everyone is approved at
Viers Auto Sales
regardless of your credit.
- Even if this is my trade in?
man: Approved.
- Even if I'm self-employed?
man: Approved.
- Even if we have two
repossessions,
a foreclosure
and a bankruptcy?
man: Everyone is approved.
- Okay, listen.
I don't mean to be judgy,
but don't approve the clown.
He's a clown.
Genetically speaking,
he is programmed for m*rder.
Now, that ad is targeting
people with bad credit,
who are only eligible for what
are called sub-prime loans.
And nearly a quarter of all car
loans are now of the high-risk,
sub-prime variety.
In fact, so many
are being issued,
they've recently reached
a 10-year high.
And if the phrase,
"a boom in sub-prime loans"
is making your eye
twitch with flashbacks
to the mortgage crisis,
just wait. We will get there.
But first,
let me take you on a tour
of the sub-prime auto
loan industry.
And we'll start with so-called
"buy here, pay here" dealers,
who do their own lending.
They've been around for years,
and their ads make it all
look very simple.
- How can we get you financed
when others can't?
Two reasons.
First, we are the bank.
We don't have to send you
or your deal anywhere.
The second reason we can
get you financed
is because we don't even
look at your credit score.
- Of course! In fact,
we don't even know what
a credit score is!
What's a good one?
PG-13?
Three under par?
Is that a good credit score?
We've got no idea and that's
why you should trust us.
And look, theoretically,
it is a good thing
that car dealers
lend money to people who can't
get financing elsewhere.
But in practice, these
dealerships can trap people
with few options into paying
vastly more than a car is worth.
It's just one of the many ways
in which, when you're poor,
everything can be
more expensive.
The average interest rate at
a "buy here, pay here" lot
is 19 percent, with
some paying up to 29 percent.
And that interest is on top
of mark-ups and add-ons
that can inflate
the price of the car.
So just look at Arlene Jones,
she went into
a Chicago dealership,
trusting they would help her.
man: When she first got
to the quick auto lot,
she told the salesman she had
an upper limit on price.
I told him, I said, I can't
afford no car over $3,000.
man: She says he
was very reassuring.
Like, don't worry about it.
He said, you can handle it.
man: In the end,
Arlene borrowed $8,600
at 24.9 percent interest
over three years.
If she had paid off the loan,
she would have spent
more than $13,000,
on a car that was only worth
about three thousand.
- Holy shit.
That is outrageous.
The only way it's acceptable to
sell someone a $3,000 car
for $13,000 is if you slip
a mint condition X-Men issue one
in the glove compartment.
At that point,
you're being generous.
But it's no wonder that
"buy here, pay here" loans
had an average default rate last
year of nearly one in three.
With most customers who
default doing so
just seven months after
taking out the loan.
Just think about that.
Seven months is not
a lot of time.
If you put
a seven-month old baby
in front of
the screen right now,
it wouldn't understand
anything I'm saying.
It wouldn't even know
if I was making fun of it.
I'll show you.
Go ahead.
Get a baby and put it
in front of the screen.
Here we go.
Hey, dummy! Hey!
You don't know that I'm mocking
you to your stupid widdle face,
do you? No, you don't!
No, you don't!
Who knows about that?
Not you. You don't mind.
You don't mind at all.
See? Seven months is not long
enough to do anything.
Now put the kid to bed,
you're a terrible parent.
But the problem is,
the problem is,
even if you're just a few
days late on a payment,
the dealership can
repossess your car.
And when they do,
sometimes,
it is with little regard
for what's inside.
- When the mother went to pick
up her three children
at a daycare she left her nine-
month-old in the car,
but when she came out there
was no baby and no car.
- I wish when you repo a car,
you check the car before you
take it. That's really it.
Just don't, you know,
take nobody's baby.
- Yes, exactly,
"don't take a baby"
is a good general rule
for everyone.
Whether you're
repossessing a car,
choosing a prom date,
or making a selection
in the NFL draft,
don't take a baby.
You don't take a baby.
I don't care what they
did in the combine.
And increasingly,
it's not difficult for
"buy here, pay here" dealerships
to repossess your car,
because many now install
a special device which goes off
when your payment is due.
- Every five seconds the device
is actually beeping at them,
as they're way-- all the way
taking the kids to school,
all the way to work.
It's informing them that they
need to make their payment,
contact their lender.
However, if they don't,
then the device, at midnight,
most lenders choose midnight
as their time of shut-off,
device will not allow
that car to start.
- Okay, setting aside
the horror of the fact
that they can shut
your car off,
that beeping sound
is unbelievably annoying.
Anyone with a smoke detector
knows it only takes about
before you've lost your mind.
"I pushed the button,
unscrewed the top,
"and I smashed the whole
thing with the bread maker
"and it's still
making that sound,
"so the only reasonable
option now is
to set my f*cking house
on fire."
And once they've
repossessed your car,
these dealers don't have
to refund your down payment.
And they might decide you
still owe them money,
because the car is
now worth less
than they sold it
to you for.
So you can easily end
up with no car,
and thousands
of dollars in debt.
Meanwhile,
the dealer can turn around
and sell your car
to someone else.
So the truth is,
they can make money either way.
And the same car can get sold
this way over and over again.
And to prove that, let me take
you on a magical journey.
Because a few years ago,
the LA Times tracked
the sales of one car
from a Kansas City
"buy here, pay here"
dealer.
It was a 2003 Kia Optima
much like this one.
It had a bluebook value of
$5,350, but in April of 2008,
it was sold for nearly $11,000,
or double its bluebook value.
The original buyer complained
of mechanical problems
and refused to make payments,
so the car was repossessed
and sold again in August
before being repossessed again
four months later, and was then
re-sold after just three weeks,
before being repossessed again
from a mother of three who,
without transportation,
lost her job at Wal-Mart.
It was then re-sold again
in May 2009 to an owner
who complained of
transmission trouble,
so the dealer took it back,
and re-sold it
just four weeks later,
after which it was,
you'll never guess,
repossessed again
from an owner who later
filed for bankruptcy,
thanks in part to payments he
owed on this piece-of-shit car.
But wait, we're not done.
It was sold again that December
and was repossessed just
five months later,
before being re-sold in May.
and it was then, surprise,
repossessed again,
even though the owner,
a mother of four,
claimed she made
every payment.
And then, according
to the LA Times,
it was sold one last
time before being
repossessed just one
month later.
That one car changed hands
eight times in three years,
each time at a price double or
even triple its bluebook value.
At which point,
you almost feel bad for the car,
which presumably needed two
sessions of therapy a week
just to be able to start
its crappy engine again.
Now, that's where
the LA Times left it,
but we felt so
emotionally involved,
we actually tracked
that car down,
and discovered that since then,
it has been sold again,
repossessed again,
and then sold yet again,
and when we called
the last listed owner,
she said it had been stolen,
and I really hope
whoever did that
drove it straight off
a f*cking cliff.
Although I'm guessing
even then,
some sleazy lobster wound
up selling it
to a poor unsuspecting fish.
Now, after seeing that,
you may be glad to hear that
"buy here, pay here"
lending has lost
market share in recent years.
Unfortunately,
that is only because
it seems everyone is getting
into sub-prime auto lending now.
There is a surprising amount of
competition to give car loans
to people with poor credit,
so much so,
people who've recently declared
bankruptcy are being
actively targeted through
the mail.
Just listen to one bankruptcy
lawyer describe what he's seen.
- These are all car
loan solicitations.
High-interest car loan
solicitations sent
to my bankrupt clients,
people who have already
filed bankruptcy.
Here's one that looks
like a check,
and it's made out to $21,000.
I guess it's gonna be a used car
with a signature and everything,
sent to one of my clients.
Here's one that looks like some
kind of an official certificate.
They encourage you
to apply for a car loan,
even if you've suffered
bankruptcy, car repossession,
foreclosure,
or all of the above.
[laughter]
- That is a slightly weird tone
of voice to use there.
He sounds almost excited
about a bankruptcy,
a car repossession,
and a foreclosure.
It's like the doctor saying,
"Wow, you have herpes,
HPV and gonorrhea.
"Most people only get one!
You've gotten a hat trick."
Oh!
And this feeding frenzy over
sub-prime customers
now includes big lenders, like
Santander and GM Financial.
They've both expanded their
sub-prime auto financing,
and there are newer players,
like Skopos and Exeter,
who specialize
in subprime lending.
And you might be wondering
why the f*ck is everyone
in such a hurry to lend money
to people with bad credit?
I mean, sure,
in the mortgage crisis,
they were doing that
so they could bundle
those high-interest
loans together
and sell them on Wall Street,
but there is absolutely no way
that is happening--
That is happening again!
That is exactly what is
happening right now.
And people have actually
been worried about this
for a while now.
- Is there a new bubble that's
about to burst
in the auto sector?
Does this concern you
at all, though,
that it could possibly become
a repeat of the home loan boom?
- Do you see similarities
between the housing crisis,
and what's going on now
with used car loans?
- Is there concern now that
there's going to be another
sub-prime crisis, except it's
not going to be mortgages,
it's gonna be car loans?
- Yes, there is concern
this could be
the sub-prime mortgage
crisis, but with cars.
And normally, if you add
the phrase "but with cars"
to any historical event,
it sounds a lot more fun,
like, "the assassination of
Abraham Lincoln, but with cars."
Sadly, this is the exception
to that rule.
Now before you panic,
experts say
there are important
differences here.
Sub-prime auto loans are a much
smaller part of the overall
economy than sub-prime
mortgages were.
So even if they do go bust,
this wouldn't necessarily be
"the big short" all over again,
so much as
the direct-to-video version,
with Brad Garrett
instead of Brad Pitt,
and instead of Ryan Gosling,
an actual gosling named Ryan.
And Wall Street firms insist
they've learned their lesson
and have set things up
in such a way
that tons of
loans can default,
and investors will
still be fine.
But...
there are trouble signs.
For instance, standards
for some of the loans
being sold as investments
can be shockingly lax.
- We've seen deals come to
market with very low FICO scores
and in some cases no credit
scores at all, which is amazing.
- Some people joke you really
just need a pulse right now
to get a sub-prime auto loan.
So...
- Ha, ha, ha.
That's a good joke.
Solid setup, hard punch line,
potentially devastating effect
on the American economy.
Top-shelf comedy there.
It's the rule of three
is what it is.
And behind closed doors,
some in the lending industry
openly acknowledge conditions
are deteriorating.
In fact, when we sent hidden
cameras to a debt buyers'
conference in Vegas a few months
ago, we stumbled on Ken Shilson,
head of the national alliance of
"buy here, pay here" dealers.
He sees trouble brewing,
because he thinks in attempting
to keep pace with
the big players who've
entered the sub-prime industry,
His own dealers are being forced
to issue longer-term loans
with less money down
at higher costs,
to clients who are therefore
at greater risk of default.
And these lending trends
are terrible news for borrowers,
but to hear him tell it,
it's a great opportunity for
those who buy bad debts
and collect on them.
[man reading onscreen text]
- Wow, that is
both inspirational
and profoundly upsetting.
It's like if the song,
"I Believe I Can Fly"
merged with the rest
of R. Kelly's life.
Now, listen.
Listen.
The news, the news...
don't Google that.
Listen, the news that used-car
dealers are predatory
is clearly not new.
But it seems these days,
market pressures are forcing
them to be more aggressive
and take more risks
to the point where we may
be getting close to an industry
that looks like this.
♪
Well, howdy there, folks!
Do you need a car?
You can't afford a car?
No problem!
Just come right on down today
to Crazy Johnny's!
voice: Cra-cra-crazy Johnny's!
But don't take it from me,
take it from my cousin,
Crazy Jimmy!
Come on out, Jimmy.
[all cheering]
voice: Cra-cra-crazy Johnny's!
Come on,
Crazy Johnny!
I love the smell of
deals in the morning!
I got a question.
Do you have bad credit?
[voice reads onscreen text]
Have you filed for bankruptcy?
[voice reads onscreen text]
Is your credit so bad that
giving you a high-interest loan
will trap you under
a mountain of debt
from which there's
no hope of escape?
[voice reads onscreen text]
And if you come
in today,
we've got a beautiful
offer for you right now.
This here is
a pre-pre-pre-pre-pre-pre-owned
[voice reads onscreen text]
Jimmy, tell the people
what it comes with.
It comes fully loaded with four
tires, up to one engine,
and a beeping device which
emits a sound
that will haunt
your dreams!
Does it come with
anything else?
If you check the backseat, this
car has a f*cking baby in it!
voice: B-b-b-baby!
There's an actual baby
in this car right now!
I have serious personal
reservations about the situation
this child is in!
Don't focus on that.
This car is worth $2,000,
but we'll let you have it for
zero down, and just $200 a month
for the next seven years!
That's nearly $17,000!
No, no, no, no!
Don't do the actual
math on that!
Think of it like this, act
now, and this car will
affect every financial
decision you make
for the best part
of the next decade!
and that is
a Crazy Johnny promise!
voice: Cra-cra-crazy Johnny's!
And the crazy thing is,
this piece of shit car
is actually an opportunity
for Wall Street too!
But don't listen to me, listen
to our accountant, Crazy Walter!
Come out here, Walter!
Come out here, Walter!
voice: Walter is crazy.
[horn honking]
Well, it's true.
If you set aside the human
misery this loan has
the potential to cause,
as part of an
over-collateralized security,
this can be sold
as a high-yield investment.
Damn, Walter!
That has disturbing echoes
of the mortgage crisis!
The point is, it's so easy for
us to get you in this car,
why, it's almost criminal!
It truly feels like it should
be a criminal activity!
And yet somehow it isn't!
Cra-cra-crazy Johnny's!
That's our show! Thank you
so much for joining us!
We'll see you next week!
Good Night!
[all cheering]
voice: We don't care.
We don't give a f*ck.
Cra-cra-crazy Johnny's!
♪
Cra-cra-crazy
Johnny's!
Cra-cra-crazy Johnny's!
Cra-cra-crazy Johnny's!
Cra-cra-crazy
Johnny's!
We don't care.
Cra-cra-crazy Johnny's!
Cra-cra-crazy
Johnny's!
Cra-cra-crazy Johnny's!
Cra-cra-crazy
Johnny's!
[all phrases overlapping]
[horn honking]
We don't give a f*ck.
[bright tone]
03x21 - Subprime lending
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American late-night talk and news satire television program hosted by comedian John Oliver.
American late-night talk and news satire television program hosted by comedian John Oliver.