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CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S ERIN BURNETT SITS DOWN WITH JAMES B. LEE, JR., JP MORGAN CHASE VICE CHAIRMAN, TODAY ON CNBC'S "STREET SIGNS"


BURNETT: JAMES LEE, WE APPRECIATE YOU TAKING THE TIME. KEN CHENAULT WAS HERE AND MUCH MORE NEGATIVE THAN PEOPLE PERHAPS WOULD HAVE HOPED FOR. SAYING BEST CASE RECOVERY, SECOND HALF OF NEXT YEAR AND DOESN'T THINK IT'S FAIR TO SAY THERE'S GREEN CHUTES OUT THERE RIGHT NOW. IF HE'S RIGHT, WHAT DOES THIS MEAN FOR THE MARKET WHICH HAS COME SO FAR FROM ITS MARCH LOWS?

LEE: IT'S GREAT TO BE HERE AND LET ME COMPLIMENT YOU AND HERB ALLEN FOR PLAYING THE WILLIAMS COLLEGECARD TO GET ME ON YOUR SHOW. BY THE WAY, I HAVE TO WARN YOU, JAMIE DIMON HAS BEEN COACHING ME ON HOW TO DEAL WITH YOU.

BURNETT: WELL YOU KNOW WHAT JAMIE IF YOU'RE OUT THERE, I HOPE HE DIDN'T LISTEN TO A WORD YOU HAVE TO SAY. YOU WANT TO DO A GOOD INTERVIEW RIGHT

LEE: RIGHT EXACTLY. BACK TO THE MARKET, STARTING REALLY IN JANUARY, THE HIGH GRADE BOND MARKET JUST TOOK OFF, FIRST TIME THEY'VE REALLY DONE THAT IN SOME TIME SINCE EVERYTHING STARTED. BY MARCH, THE HIGH YIELD MARKET TOOK OFF. BY MAY AND JUNE, THE EQUITY MARKETS HAD A COUPLE OF THE BEST MONTHS THAT THEY'VE EVER HAD. SO IF YOU THINK BACK TO THE FALL WHEN THE REGULATORS AND THE POLICY MAKERS WERE SAYING WE NEED TO GET THE BARGES THAWED IN THE RIVER, IT'S THAWED. ALL OF THAT ACTIVITY, HOWEVER, HAS REALLY BEEN REFINANCING, HAVEN'T REALLY BEEN ANY BIG ACQUISITIONS. THERE'S BEEN A COUPLE BUT THEY CERTAINTY HAVE NOT BEEN THETREND.THE TREND HAS BEEN REFINANCING. AND ERIN, WILL CONTINUE TO SEE THAT TREND IN THE LEVERAGE FINANCE MARKET ALONE, THERE'S ONE TRILLION OF MATURITY THAT'S ARE COMING DUE OVER THE NEXT FIVE YEARS SO WE ARE GOING TO SEE A LOT MORE OF THAT.

BURNETT: CAN THEY REFINANCE IT? IS THERE A MARKET FOR THAT? IT'S ALL COME DUE AND SOME PEOPLE SAY IT'S ARMAGEDDON.

LEE: THAT LEADS BACK TO THE OTHER PART OF YOUR QUESTION, WHICH IS WHAT IS GOING ON IN THE ECONOMY.ONE REASON, FOR EXAMPLE, THE M&A MARKET HAS BEEN QUIET TO SAY THE LEAST, IN FACT THE SECOND QUARTER OF 2009 WAS ONE OF THE QUIETEST QUARTERS IN M&A OVER THE LAST TEN YEARS, ONE REASON FOR THAT.THERE'S THIS REAL MEXICAN STANDOFF BETWEEN BUYERS AND SELLERS. SELLERS LOOK BACK AT THEIR 52-WEEK HIGH AND SAY, GEE, WASN'T THAT TERRIFIC. AND BUYERS, MANY OF WHOM OUT HERE IN SUN VALLEY ARE SAYING WHERE'S THE BARGAIN. YOU'VE REALLY GOT THIS STANDOFF RIGHT AT THE MOMENT. IN THE MEANTIME, EVERYBODY HAS BEEN ACCUMULATING CASH, PUSHING MATURITIES OUT IN TERMS OF REFINANCING, NOT SPENDING AND ATSOME STAGE THIS M AND A MARKET WILL COME ALIVE IN A REALLY BIG WAY. THAT'S TRADITIONALLY HOW THIS ALL PLAYS OUT.

BURNETT: LET ME THROW UP -- YOU'VE SEEN US DO THIS THIS MORNING, OUR MULTIPLE CHOICE SCREEN IN TERMS OF WHERE WE ARE. CAUSE YOU TALK ABOUT THE FINANCING MARKET AND THE CREDIT MARKETTHERE WERE SEVERAL CHOICES IN TERMS OF WHAT'S GOING TO HAPPEN WITH U.S. ECONOMY, JAPAN, ARGENTINA, THE GREAT DEPRESSION, D, STAGFLATION 70s OR E OTHER.FROM YOUR POSITION DEALING WITH ANYBODY WHO'S GOING TO BE DOING A DEAL OR REFINANCING A DEAL, ADVISING GM AND CHRYSLER ON THESE, WHAT'S THE RIGHT CHOICE?

LEE: MY OPINION ON THIS TOPIC IS FIRST AND FOREMOST, GEITHNER AND PAULSON AND THAT WHOLE TEAM LAST FALL DID AN ABSOLUTELY BRAVE, HEROIC COURAGEOUS, SWIFT ACTION THAT STABILIZED EVERYTHING AND STARTED TO RESTORE CONFIDENCE. I THINK THE NEW ADMINISTRATION HAS COME IN AND THEY'VE STEPPED THAT UP, LET'S FACE IT.LOOK WHAT THEY DID WITH THE CAR COMPANIES AND A LOT OF OTHER AREAS.

BURNETT: YOU THINK WE'RE ON THE RIGHT TRACK?

LEE: I DO THINK THAT'S ON RIGHT TRACK, BUT, AND IT IS A BIG BUT, WHAT HAS TO HAPPEN NOW, DEMOCRATS AND REPUBLICANS AND PRIVATE SECTOR, PEOPLE ON THE HILL AND WHITE HOUSE, AS AMERICANS WE ALL HAVE TO WORK TOGETHER TO MAKE SURE WE DON'T END UP IN ANY ONE OF THOSE PLACES THAT YOU'VE JUST ARTICULATED. I'M A LONG-TERM OPTIMIST ON OUR COUNTRY AND ON OUR COMPANY, I MIGHT ADD. 34 YEARS AT ONE COMPANY. YOU WOULD THINK I COULD GET IT A NEW JOB AT SOME STAGE --

BURNETT: LET ME ASK THE QUESTION THAT A LOT OF PEOPLE ARE ASKING.THERE ARE HEAD HUNTERS ALL OVER WALL STREET AND A LOT OF PEOPLE ARE LEAVING WHETHER TO GO TO START UPS OR FOREIGN BANKS WHERE THEY DON'T THINK WILL HAVE THE SAME SORT OF RESTRICTIONS WHETHER IT BE ON COMPENSATION OR ANYTHING ELSE. WOULD YOU ADVICE SOMEONE TO GO TO WALL STREET RIGHT NOW AND DO YOU EVEN IN YOUR OWN POSITION AFTER 34 YEARS THINK JP MORGAN CHASE WILL BE A PLACE WHERE YOU CAN MAKE MONEY AND DO DEALS NOW THAT YOU'VE GOT THE GOVERNMENT INVOLVED?

LEE: FIRST OF ALL, I'LL TRY NOT TO BELABOR THIS. I THINK WALL STREET IS ONE OF MANY PLACES THAT YOUNG PEOPLE CAN GO.WHENEVER I SPEAK TO YOUNG PEOPLE, THERE'S A LOT OF GREAT JOBS OUT THERE. THE KEY IS NOT WHAT GREAT JOB YOU END UP WITH, OR HOW HARD DO YOU TRY TO BECOME THE BEST THAT THERE IS AT THAT JOB. NOW, IN THE CASE OF WALL STREET, WHAT'S IN WALL STREET?A LOT OF SMART PEOPLE AND HARD WORKING PEOPLE AND A LOT OF INTELLECTUAL STIMULATION AND A LOT OF GOOD PEOPLE TO WORK WITH. THAT'S WHAT I HAVE. I'M LUCKY TO HAVE --

BURNETT: BUT MONEY WAS A BIG PART OF IT.YOU COULD EARN MONEY ON WALL STREET. CAN YOU STILL EARN MONEY ON WALL STREET?

LEE: HERE'S MY THEORY ON THAT. THAT'S A MUCH LONGER DISCUSSION THAN WE HAVE RIGHT NOW.I THINK MONEY IS A TRAILING VARIABLE AND I THINK WHAT COUNTS THE MOST IN ANYONE'S ENDEAVOR, WHETHER IT'S YOU DOING YOUR JOB,ME DOING MY JOB, TOM BROKAW DOING HIS JOB, IT'S JUST BEING THE BEST YOU CAN BE. SUCCESS AND MONEY AND WHATEVER ELSE TURNS YOU ON WILL FOLLOW THAT. THOSE --

BURNETT: YOU ARE AN ETERNAL OPTIMIST AND YOU'RE A CLIENT GUY I CAN TELL BY THE WAY YOU ARE HANDLING THIS INTERVIEW.TWO QUICK QUESTIONS FOR YOU, YOUR CREDITED BY SOME AS INVENTING THE SYNDICATED LOAN OF WHICH WHAT THERE WERE A FEW TRILLION DOLLARS OF THAT DONE EVERY YEAR, LAST YEAR ALMOST NOTHING BECAUSE IT WAS IN MANY WAYS GROUND ZERO OF THE CRISIS, TAKING LOANS, PACKAGING THEM AND SELLINGTHEM TO OTHER PEOPLE. WHAT'S THE NEXT BIG PRODUCT ON WALL STREET.

LEE: THERE'S AT LEAST THREE THINGSTHAT ARE IN SOME DYSFUNCTIONAL STATE RIGHT NOW.THE WHOLE ASSET BACKED MARKET HAS GROUND TO A HALT. I'M NOT TALKING ABOUT WHAT NO ONE WANTS TO BRING BACK THE THE SUPER ARCANE, SUPER COMPLEX SECURITIES THAT NEVER SHOULD HAVE BEEN ISSUED AND HOPEFULLY THAT'S GONE FOREVER. I'M NOT TALKING ABOUT THAT.I'M TALKING ABOUT SIMPLY THOSE FINANCE COMPANIES THAT USE RECEIVABLES TO FINANCE THEMSELVES. SOMETHING NEEDS TO BE DONE ABOUTTHAT MARKET.IT'S A HUGE MARKET, NUMBER ONE. NUMBER TWO. THE INSTITUTIONAL MARKET IN THE LEVERAGE BUYOUTS AND ALL NONINVESTMENT FINANCE, CDOS, CLOS THAT'S ALL ALMOST GONE.IMAGINE THIS. IN THE HEIGHT OF THE LBOs THERE WAS IN 2005, A $4 BILLION B LOAN DONE, THE NEXT YEAR THERE WAS LIKE A $10 BILLION B LOAN DONE THEN THE TXU DEAL, THAT FAMOUS ONE OF THE LAST ONES, $21 BILLION B LOAN DONE. NOW YOU CAN PROBABLY ONLY DO A $1 BILLION B LOAN. SOMETHING HAS TO BE DONE THERE. THE LAST THING I WOULD SAY ABOUT YOUR QUESTION IS REVOLVING CREDIT. BANKS HAVE ALWAYS BEEN PROVIDERS OF REVOLVING CREDIT THAT IS A DIFFICULT MARKET AND SOMETHING NEEDS TO BE DONE THERE.

BURNETT: THREE OPPORTUNITIES FOR YOU THEN.THANKS FOR TAKING THE TIME. JIMMY LEE, VICE CHAIRMAN OF JP MORGAN CHASE.




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