CNBC Exclusive: CNBC Transcript: Goldman Sachs Chairman & CEO Lloyd Blankfein Sits Down with CNBC’s David Faber on CNBC’s “Power Lunch” Today

WHEN: Today, Wednesday, October 19th

WHERE: CNBC's "Power Lunch"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Goldman Sachs Chairman & CEO Lloyd Blankfein today, Wednesday, October 19thon CNBC's "Power Lunch" (M-F, 1PM-3PM ET). Following are links to the video on CNBC.com:http://video.cnbc.com/gallery/?video=3000560736 and http://video.cnbc.com/gallery/?video=3000560732.

All references must be sourced to CNBC.

FABER: THANK YOU VERY MUCH, MELISSA. WE ARE JOINED BY MR. BLANKFEIN, NICE TO HAVE YOU HERE, NICE TO BE HERE WITH YOU, I GUESS I SHOULD SAY.

BLANKFEIN: GOOD IT SEE YOU, THANK YOU FOR COMING.

FABER: GOLDMAN REPORTED EARNINGS YESTERDAY, MORGAN STANLEY REPORTED TODAY, LAST WEEK JPMORGAN, BANK OF AMERICA, CITI, ALL OF THEM PRETTY GOOD. THE STOCK PRICE REACTION HAS BEEN RATHER MUTED. ARE YOU A BIT SURPRISED THAT INVESTORS HAVEN'T BEEN A LITTLE MORE ENTHUSIASTIC?

BLANKFEIN: I THINK RELATIVE TO THE LOW BAR THAT HAS BEEN SET OVER THE LAST FEW YEARS, BECAUSE OF THE CAPITAL -- THEY NEED TO ACCUMULATE CAP ON ALL OF THESE – WE HAVEN'T -- HASN'T BEEN EXACTLY THE GROWTHIEST TIME, THE RESULTS WERE GOOD, NO DOUBT ABOUT IT, BUT GOOD RELATIVE TO THE LOW BAR OF THE LAST FEW YEARS. BUT FOR OUR STOCK, WHICH SORT OF CONVERGING ON BOOK VALUE, HAVING HAD IN THE LAST QUARTER DOUBLE DIGIT GROWTH, THAT WAS A GOOD SIGN. WE HAVE BEEN THAT WAY FOR THE LAST FIVE YEARS. EXCEPT FOR THE FIRST COUPLE OF QUARTERS. SO THE QUESTION IN EVERYBODY'S MIND, THE FIRST TWO QUARTERS, AN ABERRATION, OR WAS IT A SIGN OF A BAD TREND AND SO I THINK THERE IS SOME RELIEF AND IN CONNECTION WITH THAT RELIEF THE STOCKS DID GO UP. OUR STOCK WENT UP, YOU KNOW, TO MY MIND, SIGNIFICANTLY.

FABER: IT WASN'T BAD. I DON'T MEAN TO SAY -- AT THE SAME TIME, YOU FAR EXCEEDED EXPECTATIONS. GRANTED THEY ARE PERHAPS LOWER THAN THEY MIGHT OTHERWISE BE. AND BOOK VALUE, $181.25.

BLANKFEIN: WE SIT HERE IN THE STOCK IS $175 AND CHANGE.

FABER: OK NOT TOO FAR FROM IT. IS THERE GOING TO BE A DAY WHERE YOU START TO SEE A MULTIPLE TO BOOK VALUE AS OPPOSED TO BELOW IT, NOT JUST FOR YOU, BUT THE REST OF THE SECTOR OR ARE THOSE DAYS OVER?

BLANKFEIN: FIRST OF ALL, THERE IS A CYCLE TO EVERYTHING. SO THE ANSWER IS, YES. AND MY EXPECTATIONS ARE THAT -- FIRSTLY, ON TWO MEASURES, ONE, THE NOTION OF HAVING TO HAVE A DOUBLE DIGIT RETURN THAT BEING YOUR COST OF CAPITAL IS A LITTLE BIT ODD.

FABER: IT IS.

BLANKFEIN: A LITTLE BIT ODD.

FABER: ALTHOUGH YOU DID HAVE THE 11.2% RETURN ON EQUITY.

BLANKFEIN: WE DID. WE'RE THRILLED ABOUT IT. I'M PROUD IN THE CONTEXT THAT WE WERE IN. BUT THE EXPECTATION OF THE MARKET FOR A 10% RETURN IS THE COST OF CAPITAL WAS THERE WHEN THE RISK FREE RATE OF INTEREST WAS 5%. AND TODAY WHEN THE RATE OF INTEREST IS 0, IT IS THE SAME 10%, WHEN WE HAVE MORE THAN DOUBLE THE CAPITAL AND SO CONSEQUENTLY MUCH LESS RISKY. BUT ON THE REVENUE SIDE, THIS HASN'T BEEN EXACTLY THE STRONGEST TAILWIND THAT ANYBODY CAN HAVE. STILL LIVING IN A RELATIVELY LOW GROWTH MARKET, ALMOST ALL THE BUSINESSES THAT WE HAD – HAVE CORRELATE WITH GROWTH. WE FINANCE PEOPLE WHO DO TRANSACTIONS, PEOPLE DO TRANSACTIONS WHEN THEY HAVE CONFIDENCE, WHEN DEALS GET FINANCED, THEY CREATE SECURITIES, SECURITIES CREATE TRADING AND WE HAVEN'T BEEN IN THE GROWTHIEST PART OF THE CURVE. IF YOU'RE ASKING ME WILL WE EVER GET BACK THERE --

FABER: I'LL ASK YOU THAT, WILL WE EVER GET BACK THERE?

BLANKFEIN: ABSOLUTELY.

FABER: WELL IT WAS LAST FEBRUARY YOU WERE ON "SQUAWK BOX," YOU SAID THIS IS NOT THE MOST CONFIDENT MOMENT. WE'RE ONLY EIGHT MONTHS LATER OR WHATEVER IT IS NINE MONTHS LATER. BUT ARE WE MORE CONFIDENT NOW THAN WE WERE THEN OR IS IT THE SAME?

BLANKFEIN: I THINK WE ARE. THE MARKET HAS IMPROVED. THE MARKETS HAVE IMPROVED FOR THESE COMPANIES. THEY'RE NOT WHERE I WOULD EXPECT THEM TO BE WHEN GOOD RESULTS AND WHEN GROWTH AND HIGHER PACE OF GROWTH IS ESTABLISHED. BUT WE'RE DIRECTIONALLY HEADING TOWARD THAT.

FABER: DO YOU EVER, THOUGH, OUTRUN THE IMPACT OF THE FINANCIAL CRISIS? BY THAT, I DON'T MEAN FINANCIALLY, I MEAN IN THE BROADER ZEITGEIST, FIRST OF ALL, AND GENERALLY AS A RESULT OF THE REGULATIONS THAT HAVE ACCRUED AS A RESULT OF THE CRISIS ITSELF.

BLANKFEIN: NO, NO, SURE, THERE ARE CYCLES TO THESE THINGS. SOMETIMES THE CYCLES TAKE SO LONG. YOU THINK, GOSH, THESE THINGS ARE PERMANENT. HELPS TO STEP AWAY AND LOOK BACK. WE HAD A GREAT DEPRESSION AT ONE POINT. WE HAD A LOT OF REGULATION. IT WAS A LONG AGO BUT WE HAD TIME FOR MEMORIES TO DIM, FOR REGULATION TO GET ADJUSTED, FOR IT TO GO TOO FAR IN THE WRONG DIRECTION, AND RE-COVER AND GET INTO A MUCH MORE SEVERE DIRECTION. AND THOSE CYCLES HAVE TAKEN PLACE. IF YOU ASK ME, IS THIS THE END OF ALL CYCLES AND IS THIS MOMENT FROZEN, NO, AND BY THE WAY, I SAID THE SAME THING WHEN WE WERE AT THE -- WHEN THE PENDULUM WAS IN THE OTHER DIRECTION, AND THINGS SEEMED TO BE VERY, VERY FROTHY. I CERTAINLY REMINDED EVERYBODY AT WORK AND ANYBODY ELSE WHO ASKED ME THE QUESTION, I SAID, THIS IS NOT GOING TO LAST --

FABER: MULTIPLE TO BOOK FOR YOUR STOCK DO YOU REMEMBER?

BLANKFEIN: OH MY GOSH WE HAVE BEEN PUBLIC FOR 17 YEARS, I REMEMBER OUR MULTIPLE TO BOOK WAS FOUR.

FABER: FOUR. DEALS WERE GETTING DONE. WE'LL NEVER GET BACK TO FOUR TIMES.

BLANKFEIN: NEVER -- LET ME TELL YOU, IT IS AS MUCH A VANITY TO SAY SOMETHING WILL NEVER HAPPEN AGAIN AS IT IS TO SAY I'M SURE THIS WILL HAPPEN.

FABER: OKAY. SO WAS I JUST BEING VAIN?

BLANKFEIN: IT IS -- I THINK YOU'RE -- VAIN IN THE SENSE OF, YOU KNOW, MAKING A -- IT IS HARD TO – IT IS HARD TO PROVE WHILE WE'RE SITTING HERE, I WOULDN'T MAKE THAT BET WITH YOU.

FABER: OK YOU GUYS ARE DOING SOME DIFFERENT THINGS RECENTLY. YOU'RE TAKING RETAIL DEPOSITS. YOU STARTED VERY RECENTLY AN ONLINE LENDING PLATFORM CALLED MARCUS. I WONDERED ABOUT THE NAME. IT IS MARCUS GOLDMAN I GUESS.

BLANKFEIN: YES I LOVE THAT

FABER: YOU LIKE THE NAME MARCUS?

BLANKFEIN: CALL ME SENTIMENTAL, BUT –

FABER: NO ONE ELSE KNOWS WHO MARCUS GOLDMAN WAS THOUGH IT IS A RETAIL NAME.

BLANKFEIN: I THINK IT IS A NICE NAME. HAS SOME MEANING IN THE FIRM.

FABER: OKAY. FAIR ENOUGH. BUT WHY ARE YOU DOING ALL OF THIS? THIS IS GOLDMAN SACHS. RETAIL DEPOSITS, LOANS OF $30,000 OR LESS TO HELP PEOPLE CONSOLIDATE THEIR CREDIT CARD DEBT.

BLANKFEIN: LOOK, THE RETAIL DEPOSIT – THESE THINGS ARE SEPARATE. THE RETAIL DEPOSIT WAS AN OPPORTUNITY FOR US. YOU HAD GENERAL ELECTRIC WHICH WAS IN THE PROCESS OF DEBANKING, SHEDDING ITS ONLINE PLATFORM, AND AT THE SAME TIME, WE'RE ALWAYS LOOKING FOR WAYS OF DIVERSIFYING OUR FINANCING. WE WEREN'T HUNTING FOR IT, WOULDN'T HAVE CREATED IT IF IT WASN'T OTHERWISE AVAILABLE, BUT AT THE MOMENT THEY WERE SELLING, IT SEEMED LIKE A GOOD IDEA FOR US TO ACQUIRE IT. AS AN ALTERNATIVE SOURCE OF FUNDING FOR A FIRM THAT IS OTHERWISE -- FOR THE MOST PART A WHOLESALE FUNDER. THAT'S SEPARATE. WE DID IT -- IT MADE A LOT OF SENSE FOR US. AS FAR AS THE LENDING PLATFORM THAT WE'RE DOING, LOOK, OUR GROWTH IS GOING TO COME FROM A VARIETY OF THINGS. THIS LENDING BUSINESS IS NOT HUGE IN THE CONTEXT OF OUR RANGE OF ACTIVITY.

FABER: NO, UNDERSTOOD. AND APPARENTLY MADE YOUR FIRST LOAN ONLY YESTERDAY, I THINK. HARVEY SCHWARTZ SAID ON THE CALL.

BLANKFEIN: FROM LITTLE ACORNS.

FABER: RIGHT.

BLANKFEIN: RIGHT. BUT ON THE WHOLE, THERE IS – LOOK, OUR GROWTH IS GOING TO COME FROM A RECOVERY IN THE MARKETS IN WHICH WE'RE ALREADY PROMINENT. LIKE I SAID, CONFIDENCE COMES BACK, PEOPLE DO MORE DEALS, THE DEALS GET FINANCED, WE FINANCE THEM, WE CO-INVEST WITH THEM. SO THAT'S REALLY – WE MANAGE PEOPLE'S MONEY IN RISKY ASSETS WHEN RISKY ASSETS ARE RISING. AND SO THAT'S WHERE MOST OF OUR GROWTH WILL COME UP. A SECOND ORDER IS DOING WHAT WE DO IN MARKETS WHERE WE'RE ALREADY PROMINENT, IN NEW EMERGING MARKETS. SO CHINA GROWS, AND LATIN AMERICA GROWS, AND EASTERN EUROPE GROWS. AND THAT'S A MARKET THAT IS ALSO BEEN SLOW IN THIS PERIOD DURING THE FINANCIAL CRISIS AND ITS AFTERMATH AND RECESSION. THOSE MARKETS HAVE SLOWED DOWN. SO WE'RE OBVIOUSLY INVESTED IN THOSE PLACES, PEOPLE ASSOCIATE US WITH CHINA AND WITH BRICS. AND THAT IS TRUE, BUT THOSE MARKETS HAVE BEEN RELATIVELY SLOW. THAT'S A SOURCE OF GROWTH. BUT WE'RE NOT JUST SITTING AROUND SINGING KUMBAYA WAITING FOR MARKETS TO COME BACK. AND OPPORTUNITIES THAT WE THINK ARE GOING TO BE IMPORTANT IN THE FUTURE TO RALLY, WE'RE ALSO DOING OTHER THINGS THAT WE CAN DO. AND IN THE CONTEXT OF OUR REGULATED BUSINESSES, THE WAY THEY ARE, AND BEING A BANK – IT'S NOT A HYPOTHETICAL. DO WE WANT TO BE A BANK?

FABER: YOU ARE A BANK.

BLANKFEIN: WE ARE A BANK. WE HAVE THE BURDEN – THE REGULATORY BURDENS, CAPITAL REQUIREMENTS, THE RESTRICTIONS OF THE BANK, THE COSTS OF MAINTAINING THE BANK. WE ALSO WANT TO HANG SOME REVENUE OPPORTUNITIES INTO IT. AND A BIG CATEGORY FOR US AND WE KNOW WE ARE GOING TO PURSUE IS MORE LENDING. AND YOU SEE IT IN THAT CONTEXT, THIS MARCUS VEHICLE FOR US IS NOT SO MUCH THAT WE'RE GOING INTO THE CONSUMER BUSINESS. NOW, IT IS A CONSUMER BUSINESS. WHAT WE ARE DOING IS WE'RE GOING INTO MORE LENDING BUSINESSES. BUT LENDING BUSINESSES THAT MAKE SENSE TO US THAT PLAY TO OUR STRENGTHS, THAT WE THINK WE CAN RISK MANAGE THEM. THAT AREN'T THAT RISKY TO US.

FABER: AND THIS DOES. THIS PLAYS TO YOUR STRENGTH.YOU GUYS HAVE NO EXPERIENCE IN DOING THIS.

BLANKFEIN: IT DOES PLAY TO OUR STRENGTH. THE ELEMENTS OF THIS ONLINE SERVICE ARE IT IS DIGITALLY DELIVERED, IT IS RISK MANAGEMENT AS A MACRO BUSINESS, BECAUSE YOU'RE NOT MAKING INDIVIDUAL LOAN DECISIONS BASED UPON THE CHARACTER. THE LOANS ARE NOT TAILORED LOANS, THEY'RE UNSECURED LOANS. SO IT IS JUST YOU KNOW, $25,000, $30,000 LOANS, THEY'RE NOT SECURED, SO THERE'S NOT A LOT OF ANALYSIS OR CONTRACTS OR SPECIFICS. SO IT IS RISK MANAGEMENT KIND OF ON A MACRO SENSE. IT IS ALGORHYTHMICALLY DETERMINED. SO WHEN YOU THINK OF RISK MANAGEMENT, THE MATH ASPECT OF IT, THE DIGITAL DELIVERY, THE TECHNOLOGY – THOSE PLAY TO OUR STRENGTH. CLEARLY, THERE IS A CONSUMER EXPERIENCE ON THIS END, BUT OF THE ELEMENTS OF THAT MAKE ONE SUCCESSFUL IN THIS ASPECT OF THE BUSINESS ARE A NUMBER OF THE ELEMENTS THAT REALLY ARE CORE STRENGTHS OF OURS. NOW, CLEARLY CONSUMER HASN'T BEEN A CORE STRENGTH FOR US. WE GO INTO THAT WITH REAL DETERMINATION TO GET IT RIGHT. WE SPENT A LOT OF TIME PREPPING FOR THIS BUSINESS. AND WE THINK WE HIRED VERY WELL OUTSIDE TALENT WITH CONSUMER EXPERIENCE. BUT WE'RE NOT GOING INTO THIS BECAUSE WE'RE TARGETING CONSUMERS. WE'RE GOING INTO THIS PART OF THE CONSUMER MARKET BECAUSE WE'RE TARGETING SENSIBLE LENDING OPPORTUNITIES.

FABER: BUT IT DOES SOUND AS THOUGH YOU THINK IT COULD BECOME A REAL BUSINESS FOR YOU.

BLANKFEIN: WELL, I EXPECT IT TO BE A REAL BUSINESS, IT COULD BECOME A BIG BUSINESS. YES.

FABER: YES. YOU'VE MENTIONED A NUMBER OF TIMES, THOUGH, IN OUR CONVERSATION ABOUT A LACK OF GROWTH, OR WHEN THE MARKETS COME BACK. AND THEN I'M THINKING, WELL, THE S&P IS RIGHT NEAR AN ALL-TIME HIGH.

BLANKFEIN: RIGHT.

FABER: WE HAVEN'T HAD A RECESSION IN A VERY LONG TIME. I MEAN, MANY WOULD SAY, WELL WHAT ARE YOU TALKING ABOUT? THE MARKETS HAVE BEEN JUST FINE, LLOYD.

BLANKFEIN: YES.

FABER: AND IN FACT, THEY HAVE BEEN RELATIVELY STRONG WHETHER IT IS IN HIGH YIELD OR IN EQUITIES OR IN A LOT OF DIFFERENT AREAS.

BLANKFEIN: RIGHT. NOW, THIS ISN'T THE WORST OF MARKETS AND IT IS SURELY NOT THE BEST OF MARKETS. PRICES ARE HIGH. LOOOK, WE'VE HAD VERY, VERY EASY MONETARY – I SEE THE CANNONBALL EXPRESS IS COMING BY.

FABER: YES, THERE'S SOMETHING IN OUR ROOM THAT READS A LITTLE BIT OF HISTORY OF THIS.

BLANKFEIN: YES, YES.

FABER: SO WE CAN EXPLAIN WHY THEY HAVE A TRAIN GOING BY.

BLANKFEIN: YES, YES. SAY THE QUESTION AGAIN.

FABER: IT WAS ABOUT THE GROWTH FROM THE MARKETS AND THE FACT WE HAVE HAD THEM. AND YOU WERE EXPLAINING WELL, IT IS NOT THE BEST OF MARKETS. IT'S NOT THE WORST OF MARKETS. YOU WERE STARTING TO QUOTE DICKENS A LITTLE.

BLANKFEIN: THE BEST OF TIMES, THE WORST OF TIMES. IT IS REALLY – IT HASN'T BEEN, YOU KNOW, THE PRICES ARE HIGHER, SECURITIES LARGELY BECAUSE OF MONETARY POLICY HAS BEEN SO SUPPORTIVE, IT HAS BEEN SO INFLATED. IT IS INFLATED ALL ASSETS. THERE IS ALMOST A CORRELATION OF ONE ACROSS ASSETS. THAT'S NOT A BUSINESS THAT – YOU CAN SEE THE RISE OF PASSIVE VERSUS ACTIVE. BECAUSE PEOPLE ARE TRADING EQUITIES ALMOST AS A MACRO YIELD-BEARING INSTRUMENT AS OPPOSED TO VALUE AND INDIVIDUAL COMPANIES AND PERFORMANCES. ONE OF THE RISKS THAT ARE INHERENT IN THE INTEREST RATE POLICY THAT WE HAVE IS THAT ASSETS ARE BEING PUMPED UP ALMOST INDISCRIMINATELY. THAT'S NOT A NECESSARILY A GOOD MARKET FOR PEOPLE LIKE OURSELVES WHO DO RESEARCH, WHO DISCRIMINATE, YAY CERTAIN TRANSACTIONS, DON'T LIKE OTHER TRANSACTIONS, ADVISE. IT IS NOT NECESSARY. AND ALONG WITH THIS COMES THE FEELING THAT IT IS NOT A NORMAL PERIOD. SO SINCE IT'S NOT NORMAL, IT HAS TO NORMALIZE. SO EVERYONE IS WAITING FOR THE TRANSITION TO TAKE PLACE. SO THERE IS GOING TO BE A TRANSITION IN MONETARY POLICY. HOLDS UP INVESTMENT TO SOME EXTENT. PEOPLE ARE WAITING IN THE ELECTION CYCLE FOR A TRANSITION IN CORPORATE TAX POLICY. SO DO YOU REPATRIATE MONEY NOW, OR DO YOU WAIT? IS THAT GOING TO CHANGE? SO THERE'S A NUMBER OF THINGS THAT ARE CAUSING DECISION MAKING TO DEFER ON THE ONE HAND, AND ON THE OTHER, THINGS ABOUT THE CONTEXT OF THE MARKET THAT MAKE YOU NOT TRUST THE MARKET-CLEARING PRICE OF THINGS.

FABER: UNDERSTOOD. YOU MENTIONED TRANSITION. OF COURSE, THE ONE THAT'S GOING TO TAKE PLACE IN THE OFFICE OF THE PRESIDENT, AT LEAST, IS COMING UP. THAT IS THE ELECTION FOR THAT TRANSITION. I WANT TO READ TO YOU A SPEECH – A VERY BRIEF PART OF A SPEECH FROM DONALD TRUMP LAST WEEK AT A RALLY IN WEST PALM BEACH, FLORIDA. HE SAID, "WE'VE SEEN THIS FIRSTHAND IN THE WIKILEAKS DOCUMENTS IN WHICH HILLARY CLINTON MEETS IN SECRET WITH INTERNATIONAL BANKS TO PLOT THE DESTRUCTION OF U.S. SOVEREIGNTY IN ORDER TO ENRICH THESE GLOBAL FINANCIAL POWERS, HER SPECIAL INTEREST FRIENDS AND HER DONORS." HE COULD WELL HAVE JUST USED YOUR NAME IN THERE IF HE HAD CHOSEN TO GIVEN THESE WIKILEAKS DOCUMENTS.

BLANKFEIN: WELL, HE COULD HAVE, BUT HE DIDN'T.

FABER: HE DIDN'T. BUT THE WIKILEAKS DOCUMENTS HE WAS REFERRING TO REFER TO THE SPEECHES – NOT SPEECHES ACTUALLY, THEY WERE MORE Q&A SESSIONS. ONE IN WHICH SHE DID WITH YOU AND A NUMBER OF YOUR COLLEAGUES.

BLANKFEIN: YEAH, YEAH.

FABER: WHAT DO YOU THINK OF A COMMENT LIKE THAT?

BLANKFEIN: WELL, YOU KNOW, WE'RE IN THE POLITICAL SEASON AND PEOPLE SAYING THINGS THAT – YOU KNOW, TO GO OUT AND ARGUE IN A RATIONAL WAY SOME OF THE THINGS THAT ARE BEING SAID IS A WASTE OF TIME. IF THERE IS SOME INTERNATIONAL KABBALAH GROUP, ONCE AGAIN I'M LEFT OUT OF THE PARTY.

FABER: BUT YOU ARE A STUDENT OF HISTORY. YOU KNOW WHAT THIS KIND OF IS CODE FOR, TOO.

BLANKFEIN: IN THE CONTEXT OF FINANCIAL CRISES OR DISTRESS. PART OF THE CAMPAIGN, THERE'S A VERY BIG POPULIST ELEMENT – BY THE WAY, IN THE UNITED STATES AND IN THE WORLD. LOOK WHAT'S GOING ON IN BREXIT AND THE RESPONSE AND THE REACTION. IT'S SOMETIMES HARD TO KNOW WHETHER PEOPLE ARE LEADING THE POPULATION OR THE POPULATION IS – OR THE LEADERS ARE RESPONDING TO WHAT'S THERE. BUT THIS IS A MOMENT OF TIME WHERE IT'S JUST A VERY EXTREME MOMENT, AND IF YOU WANT TO BE A SUCCESSFUL POLITICIAN, YOU UNFORTUNATELY – YOUR SUCCESS DOESN'T COME FROM HARNESSING AND LEADING THIS BACK TO A –

FABER: SO AM I TO TAKE IT THAT YOU WEREN'T MEETING IN SECRET WITH INTERNATIONAL BANKS AND HILLARY CLINTON TO PLOT THE DESTRUCTION OF U.S. SOVEREIGNTY?

BLANKFEIN: I WOULD SAY IF WE COULD PARSE THAT CLAUSE BY CLAUSE, BUT TO EVERY CLAUSE THE ANSWER IS NO, WE WEREN'T DOING IT. WE WEREN'T MEETING IN SECRET AND WE CERTAINLY WEREN'T PLOTTING THE DESTRUCTION.

FABER: IF AND WHEN WE GET AN ADMINISTRATION, AS THE POLLS SEEM TO INDICATE, THAT IS LED BY HILLARY CLINTON, DO YOU BELIEVE THAT PEOPLE ON WALL STREET WILL BE APPOINTED TO POSITIONS OF POWER AGAIN AS THEY WERE, OF COURSE, IN THE FIRST CLINTON ADMINISTRATION? OR IS THAT SIMPLY NOT SOMETHING THAT'S GOING TO BE POSSIBLE?

BLANKFEIN: YOU KNOW, I THINK IT'S JUST GOING TO BE – IT'S A VERY TOUGH ENVIRONMENT IN THE FIRST INSTANCE. THIS WILL ALSO WEAR OUT. THESE CYCLES HAVE HAPPENED BEFORE. I THINK EVENTUALLY PEOPLE ARE GOING TO HAVE TO GET THINGS DONE, ARE GOING TO HAVE TO HAVE TALENTED PEOPLE. I DON'T THINK PEOPLE SHOULD APPOINT PEOPLE BECAUSE THEY'RE ON WALL STREET. BUT I ALSO WOULDN'T PROFILE PEOPLE AND SAY THEY CAN NEVER APPOINT SOMEBODY FROM THIS INDUSTRY WHICH EMPLOYS HUNDREDS AND HUNDREDS OF THOUSANDS OF PEOPLE. AND WHERE EXPERTISE RESIDES. SO THE ANSWER IS I WOULDN'T KILL MYSELF TO RESERVE JOBS FOR PEOPLE FROM WALL STREET AND I WOULDN'T EXCLUDE VERY QUALIFIED PEOPLE WHOSE –

FABER: BUT I MEAN, GIVEN ALL THE VITRIOL DURING THIS CAMPAIGN, WHETHER IT WAS BERNIE SANDERS OR NOW HILLARY CLINTON AND/OR DONALD TRUMP, IT SEEMS HARD TO IMAGINE ANYBODY –

BLANKFEIN: NO, NO. TO POINT –

FABER: THE DAYS OF HANK PAULSON AND RUBIN TAKING TREASURY SECRETARY JOBS SEEM TO BE OVER.

BLANKFEIN: NO, NO THESE HAPPENED BEFORE. THIS HAPPENED IN OTHER CYCLES OF AMERICAN – YOU KNOW, OTHER CYCLES. IT HAS HAPPENED BEFORE AND THEN IT RECEDES. LOOK, IN THE FIRST INSTANCE, THERE WOULD BE A POLITICAL COST TO TRY AND APPOINT SOMEONE TO A KEY ECONOMIC JOB FROM WALL STREET. IS THAT COST WORTH PAYING? THE COST WILL BE VERY, VERY HIGH, AND MAYBE IN THE FIRST INSTANCE, MAYBE NOT. BUT IF YOU WANT CAPABILITY IN YOUR GOVERNMENT, AND YOU WANT EXPERTISE AND YOU WANT TO GET THINGS DONE, SOMEWHERE DOWN THE LINE, IF THE TALENT OTHERWISE ISN'T THERE, IF THE EXPERIENCE IS LACKING AND MAKES YOU AN INEFFECTIVE LEADER, THE PRESIDENT IS GOING TO WANT TO TAP INTO THE RESERVE OF PEOPLE WHO ARE QUALIFIED OR MORE QUALIFIED.

FABER: I'M GOING TO HAVE TO STUDY UP ON ALL MY CYCLES, LLOYD. FINALLY, YOU FINISHED A CYCLE OF CHEMOTHERAPY SOME TIME BACK. EIGHT MONTHS AGO, IN FACT. HOW IS YOUR HEALTH?

BLANKFEIN: I THINK – YOU KNOW, I FEEL OKAY. AS I SAID, I SAID TO YOU OFF CAMERA, I AM FEELING GREAT, BUT I HAVE TO PLOT IT AGAINST MY NORMAL DECLINE. SO I DON'T KNOW WHERE THOSE LINES CONVERGE. BUT I FEEL PRETTY GOOD AND PROBABLY I'M CURED.

FABER: WELL, THAT'S GOOD. AND RETIREMENT IS NO TIME SOON, I WOULD ASSUME.

BLANKFEIN: NOT UNLESS THERE IS SOME INTERNATIONAL KABOL WHO IS MEETING BEHIND CLOSED DOORS PLOTTING MY DESTRUCTION. BUT AS FAR AS MY INTENTIONS ARE CONCERNED, I'M HERE.

FABER: WELL, OKAY, THAT'S GOOD TO HEAR. WE'LL SEE IF WE FIND OUT ABOUT THAT IN THE NATIONAL KABOL. BUT WE ARE VERY HAPPY TO HAVE HAD YOU JOIN US. THANK YOU.

BLANKFEIN: OK. GOOD SEEING YOU.

FABER: NICE TO SEE YOU TOO.

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