Take Out A 7 Year Car Loan To Buy Stocks, CNBC Experts Advise

Tyler Durden's picture

In what can only be described as a wanton display of absurdity, CNBC dedicated not one, not two, but three segments (and those are just the ones we noticed) to subprime auto lending on Wednesday producing, in the process, three of the most hilarious clips in recent memory. 

There was Phil Lebeau with the latest numbers from Experian which show that average monthly payments hit a record high in Q4 at nearly $500 and the average amount being financed is up 4% Y/Y to nearly $24,000. It gets worse. Fully a quarter of new car loans carry terms of at least 73 months. That may sound bad, but Experian’s director of automotive finance Melinda Zabritski — the same Melinda Zabritski who last month said we are looking at a “remarkably stable automotive-loan market” — isn’t ready to pass judgement quite yet. "I haven't quite made up my mind on 84 month loans," she noted, although she did say she is “concerned.” 

We also got a classic interview with AutoNation CEO Mike Jackson who notes that if you include leasing (which is of course different from buying, but why quibble over the details), loan terms are actually only 56 months. The rest of the clip can be summed up in three words: “Trucks, trucks, trucks.” 

We saved the best for last. Watch below as Bill Griffeth and Kelly Evans host WSJ’s Jonathan Clements and Premier Financial Advisors’ Mark Martiak for a discussion on what we’re calling the car-stock arbitrage wherein you are (literally) encouraged to take out a 7 year loan with a rapidly amortizing asset as collateral in order to buy stocks. 


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ZeroNewz's picture

How about take out a tripple mortgage and car loan ... go buy gold, move to other country and flip them the bird when they come asking for their money.


Or take out outrageous loans to pay for your education ... move to another country and equally flip them the bird when they try to find you.


At the end just go bankrupt ... everyone should take out huge loans and go bankrupt.

Keyser's picture

The theater of the absurb has not only gone mainstream, they have their own channel!!!!


J S Bach's picture

"...the car-stock arbitrage wherein you are (literally) encouraged to take out a 7 year loan with a rapidly amortizing asset as collateral in order to buy stocks."


Then find yourself a nice 10th floor open window to jump out of once your stocks collapse and your payments comes due.

wallstreetaposteriori's picture

Subprime bitches.  Sounds to me just like 125%LTV HELOCs used to buy stocks in 06/07.  Remember those people?  They are the fucktards who now get free Obama phones.

Self-enslavement's picture

CNBC, like CNN and the rest of them, are criminal terrorist organizations and they should all be arrested and sent back to Israel where they com from.

NoDebt's picture

The clock on the wall says three o'clock.

Last call.... for alcohol.

(The clock would be of the cuckoo variety)

Newsboy's picture

The stocks will go bad before they repo the car.



(Why didn't I think of it?)

PartysOver's picture

With this crap going it is becoming increasingly more stressful to BTFD's.   This is going beyond stupid.  But still think more ups are coming in the US Indices.

Arnold's picture

With God all will be forgiven.

All others pay cash.

Haus-Targaryen's picture

At this point & time I think its about time to sell stawks and buy a nice used car. 

cnmcdee's picture

WOW! who has the time to pick through 100 movies to find that many 'Get out of there!' - Pretty impressive wish I had that kind of time to burn,.

daveO's picture

There must be an app for movie database searches, for specific lines. 

KnuckleDragger-X's picture

At this point & time I think its about time to sell stawks and buy a nice used car.


But that's un-American. You should be deeply and hopelessly in debt for the good of the country....

duckduckMOOSE's picture

Or, take out your loan and buy a rifle, a shotgun, a handgun and $20,000 worth of ammo?

Final Authority's picture

And training. Don't forget the training.

Georgia_Boy's picture

@Partysover Agreed, and it is even more stressful how this meme of the secular bull market is sure getting popular lately.  I am sticking so far to my value roots, which is how I've made most of my profits over the years, but it is hard not to think too much about the possible opportunity cost.  If someone is purposely spreading this meme, they are liable to cause a lot of hurt.

BLOTTO's picture

2 minutes to midnight...



Doomsday clock



PartysOver's picture

GA Boy, it is almost like they are getting desperate to find the bigger fool to start selling the trash to.   Still thinking more Ups though.  If I recall the Dot Com bubble had to get horrendously bad before it burst.  I think we are on the way but just not there yet.

giovanni_f's picture

Is there ANYTHING not absurd? We declare war to whom we just feel like for "democracy", we regard  an east-european, oligarch-infested shitheap called Ukraine as a matter worthwile to start WW-this-time-with-nukes-III, we leverage our non-capital to obtain a car loan in order to satisfy (if not there: instill) - our bucket shop addiction, and we just feel great when after weeks with shockingly bad economic data an entirely farcical opinion poll by a absolutely irrrelevant data gatherer called "Markit" delivers a statistically insignificant uptick-blip in a completely irrelevant "indicator" called "PMI". HELLOOOOO? IS THERE ANYBODY?   

taoJones's picture

+1 for George Thorogood reference

l.kimbot's picture

John Lee Hooker origin, also

So It Goes's picture

So your theory is that the Joos own and control the media and the government.  They just hire goyim mouthpieces to push their cruel agenda.  


Well that makes a lot of sense.  

Montgomery Burns's picture

Like the "theory" of gravity.

mkkby's picture

You all scoff, but this is precisely the RIGHT thing to do if you have very few assets that can be taken in a judgement.  Borrow at sub prime rates, take max risk and maybe get lucky.  If you lose, really the bank and taxpayers lose. 

This is your chance to see how the banksters do it.  Socialize the losses, keep the gains.

SoilMyselfRotten's picture

What bank will give you a bigger loan than the car is worth let alone the nightmarish depreciation? Doesn't even make sense.


More importantly, how does one short the auto sub-prime market?

Joe Panama's picture

Don't they make derivatives for that?

Odin McHaggis's picture

You can chose longer terms 72 mos. rather than 48 mos. 24000/48=500 a mos payments

or chose 24000/72=333 a mos payment and invest the difference in your 401k. The interest on a new car can zero or 1.9%. Makes sense "if" you think the market is a wise place to invest for the next 6 yrs. and you can make your payments either way.

resaci's picture

f__k payments, CASH or fagetabotit

Thirst Mutilator's picture



That's a thoroughly entertaining thought process [that is probably a likely fantasy prospect for a lot of people around here]. To that extent, it's not surprising that your comment received a lot of green arrows [simply for the humor & irony]...


On the more sober side... Anyone who whould ever actually follow through with such a plan should NEVER criticize 'shysters' again, because it's an action plan that only a 'shyster' would engage in.


Yesterday I was making comments about 'hypocrisy'. Well ~ Here is a clear cut example of the 'CHOICE' to game the system, or not. Those who opt to game the system, but then criticize the system, would be hypocrites by definition.

Just Another Truther's picture

the hypocrisy would only occur if they were criticizing the PEOPLE gaming the system. The system is already bankrupt long ago - hence the central bank monopoly money keeping it on life support.


I say get yours. I can assure you it will be small solace when someones gives you a pat you on the back for taking the high road and sinking with the ship, while you're in line begging for food tickets with the rest of the mob.


They can print money so the banks can loot and rob, let them run the ink a little for you too. We're all in this together, and the goose is already cooked... the fork is stuck. It's akin to grabbing a couple valuables out of the house before it burns down to the ground.

Thirst Mutilator's picture

Everyone is free to choose what they feel is right for themselves.

<-- Junked here by hypocrites who SWEAR that hypocrisy doesn't exist


Personally, I will choose the path whereby I answer to myself...


Notwithstanding the prospect of lining up alongside huddled masses, my predominant thought will always be that 'NOBODY can ever take my self esteem away'. If you're not afraid of losing that, you're really not afraid of anything.

FMOTL's picture

I would,nt call that hypocrisy , I,d call that guerrilla warfare.

cyclist's picture

That is SofaKing Funny JS..................but true

Just Another Truther's picture


"no one could have seen this crash coming."

Bangin7GramRocks's picture

Santelli is already planning his spittle fueled rant about the "evil deadbeat car owners" and how they ruined these fine, patriotic banks and car companies with their idiotic 84 month loans.

PartysOver's picture

I miss Santelli's rants but damn sure don't miss CNBC propoganda machine.

Fun Facts's picture

CNBC is for the people you can fool all the time.

Those are the ones you want to concentrate on.

Frank N. Beans's picture

uh, what happened to Santelli?

barroter's picture

Of course deadbeats with no assets are to be blamed. It can NEVER be the bank's fault.  In fact, it was the poor, with all their money and power,  who wiped out Lehman Bros, Merrill Lynch, AIG, Morgan Stanely....should I go on?

Ghordius's picture

careful with this sarcasm or advice, US Student Loans are not defaultable, and the US Taxman wants your money even when in foreign countries

Agstacker's picture

Interesting how student loans became illegible for debt cancellation in bankruptcy, doctors were graduating with hundreds of thousands in student loan debt, get a job making big bucks, then declare bankruptcy to cancel out their loans.  These guys are probably the ones who later wrote obamacare for the insurance companies.

Richard Chesler's picture

Contribute enough to the campaign of the next clown-in-chief and pooof! car loans become illeligible for bankruptcy.



PartysOver's picture

Interesting how student loans became illegible for debt cancellation

If I recall correctly back inte mid 90's WallStreet lobbied hard for this.  Sole purpose to to collateralize the debts to be sold like CMO's.   You can thank the pols, both sides of the isle, for this debacle,

El Vaquero's picture

It's when they became government backed.  You can fuck private industry with BK7, but don't you dare fuck the government.  See how that works?  No?  "Default" on your taxes, then get back to me.

joak's picture

And what Uncle Sam will do when you move abroad and renounce to your citizenship ?

Ghordius's picture

I'm not an expert, or even a US citizen, but I understand that you need a different citizenship, first, and then you have to do a lot of IRS paperwork, first