CNBC Press Releases

J. Scott Applewhite / AP

WHEN: Tuesday, April 8th at 4PM ET
WHERE: CNBC's "Closing Bell with Maria Bartiromo"

Following is an unofficial transcript of CNBC's EXCLUSIVE interview with Former Fed Chairman Alan Greenspan. In the interview with CNBC's Maria Bartiromo, Greenspan defend his legacy and discuss the state of the economy and the housing bubble, among other topics.

All references must be sourced to CNBC's "Closing Bell with Maria Bartiromo"

BARTIROMO: ALAN GREENSPAN WAS HAILED AS ONE OF THE CENTRAL BANKERS THAT EVER LIVED, RESPONDING QUICKLY TO THE STOCK MARKET CRASH OF 1987, RESTORING CONFIDENCE BY CUTTING INTEREST RATES AGGRESIVELY TO CURB RECESSION IN 2001. NOW CRITICS ARE BLAMING GREENSPAN FOR TODAY'S FINANCIAL CRISIS SAYING HE KEPT RATES TOO LOW FOR TOO LONG WITH TOO LITTLE REGULATION. HE IS JOINING US NOW TO SET THE RECORD STRAIGHT. STEVE LIESMAN IS WITH MR. GREENSPAN IN WASHINGTON. NICE TO HAVE YOU ON THE PROGRAM AND WELCOME BACK TO THE CLOSING BELL. YOU ARE PUTTING YOURSELF OUT THERE AND I SAW THE OP-ED IN THE FINANCIAL TIMES AND THE ARTICLE IN THE JOURNAL. LET ME GET YOU TO SET THE RECORDSTRAIGHT AND TELL ME HOW YOU FEEL OR WHAT YOU WOULD SAY TO THE CRITICISMS YOU SAY IN THE ARTICLE TODAY I WAS PRAISED FOR THINGS I DIDN'T DO AND I'M BLAMED FOR THINGS THAT I DIDN'T DO.

GREENSPAN: THAT IS FACTUALLY THE CASE.I SAID IN MY BOOK WHICH I WROTE AND PUBLISHED LAST SEPTEMBER THAT PEOPLE USED TO COME UP TO ME AND SAY THANK YOU FOR MY 401K AND I KEPT TRYING TO TELL THEM I HAD LITTLE TO DO WITH IT, IF ANY. INDEED THE MAJOR THRUST OF MY BOOK AND INDEED MY GENERAL COMMENTS HAS BEEN IT HAS BEEN GLOBAL FORCES WHICH AFFECTED EVERYBODY AND WE IN THE UNITED STATES HAVE BEEN THE GREATEST BENEFICIARIES. IF I CAN GO ON FURTHER --

BARTIROMO: PLEASE, GO AHEAD.

GREENSPAN: LOOK, AT THE MOMENT WE ARE LOOKING BACK AT A HISTORY IN WHICH MORE THAN TWO DOZEN ECONOMIES HAVE HAD HOUSING BUBBLES AND THEY ARE ALL RELATED THE BEST I CAN JUDGE STATISTICALLY TO THE DRAMATIC DECLINE IN REAL LONG-TERM INTEREST RATES THAT OCCURRED FROM THE EARLY 1990s FORWARD. INDEED THE DIFFERENCES BETWEEN THE VARIOUS COUNTRIES BUBBLES ARE NOT VERY GREAT AND THE UNITED STATES IS RIGHT IN THE MIDDLE. THE QUESTION ESSENTIALLY IS YOU CAN FULLY EXPLAIN THE BUBBLE IN TERMS OF WHAT HAS BEEN GOING ON GLOBALLY AND THE ARGUMENT THE INTEREST RATES ARE TOO LOW COULD BE A CREDIBLE ARGUMENT SINCE IT HAS BEEN PROPERLY ARGUED THAT ADJUSTABLE RATE MORTGAGES ARE LOWER AND THE VOLUMES OF ADJUSTABLE RATE MORTGAGES DID INCREASE THE THE CRITICAL QUESTION IS DID THAT INCREASE THE DEMAND FOR HOMES AND THEREFORE THE PRICE LEVEL ABOVE, OVER AND ABOVE WHAT WOULD HAVE OCCURRED FOR GLOBAL REASONS. AS BEST I CAN JUDGE BECAUSE THE CORRELATION BETWEEN HOME PRICES AND THE RATIO OF ADJUSTABLE RATE MORTGAGES TO TOTAL MORTGAGE ORIGINATIONS IS VERY WEAK AND WHAT THAT SUGGESTS IS THAT ADJUSTABLE RATE MORTGAGES THAT ROSE DID RISE IN THE EARLY PART OF THIS DECADE WERE LARGELY A MEANS OF FINANCING AS DISTINCT FROM AN ELEMENT PRESSING PRICES HIGHER AND WHAT IS FAIRLY CLEAR FROM THE DATA IS THAT IF ADJUSTABLE RATE MORTGAGES WERE NOT AVAILABLE, THE PURCHASES WOULD STILL HAVE OCCURRED, BUT FINANCE WOULD SLIGHTLY BE MORE COSTLY LONG-TERM RATES.

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