Dylan Ratigan Speaks to Allan Hubbard, White House Economic Adviser and Director of National Economic Council, on "Fast Money" (Transcript Included)

When: Monday, November 12 at 5:00 PM ET
Where: "Fast Money"

The following is the unofficial transcript of a CNBC interview with White House Economic Adviser and Director National Economic Council Allan Hubbard on CNBC's "Fast Money" today. All references must be sourced to CNBC.

In an interview with CNBC's Dylan Ratigan, Hubbard discusses the economy, consumer confidence and the possibility of a recession, among other topics.

DYLAN RATIGAN: WELCOME BACK TO "FAST MONEY" LIVE HERE AT THE NASDAQ IN TIMES SQUARE. WE'RE SITTING WITH ALAN HUBBARD. YOU KNOW WHAT THE STORIES ARE, BELIEVE ME HE KNOWS WHAT THE STORIES ARE, IF YOU'RE NOT FAMILIAR WITH MR. HUBBARD, HIS LIST OF ACCOMPLISHMENTS ARE AS LONG AS THE LIGHTS ARE BRIGHT HERE IN TIMES SQUARE. MR. HUBBARD, WELCOME, NICE TO SEE YOU.

HUBBARD: DELIGHTED TO BE HERE.

RATIGAN: I KNOW YOU SPENT A MEANINGFUL PORTION OF YOUR DAY WITH A NUMBER OF THE CEOS OF FINANCIAL SERVICES. DID YOU GET ANY GUIDANCE WITH WHERE WE STAND WITH WRITEDOWNS AND RISK AND ALL THE RESTS OF IT?

HUBBARD: I HAD A VERY PRODUCTIVE DAY.THE FUNDAMENTAL CHALLENGE THAT WE HAVE RIGHT NOW IN THE ECONOMY IS THE HOUSING SECTOR AND WE'RE ALL VERY MUCH AWARE OF THAT AND WE'RE FOCUSED ON THAT IN WASHINGTON.THE GOOD NEWS IS THE REST OF THE ECONOMY IS VERY, VERY STRONG, AS YOU KNOW THE GDP NUMBERS CAME OUT AT 3.9%. LAST WEEK WE GOT SOME VERY GOOD NUMBERS. EXPORTS ARE UP 16% YEAR OVER YEAR. PRODUCTIVITY WAS VERY VERY STRONG. WHAT WE CALL THE REAL ECONOMY IS DOING FINE, BUT WE HAVE CHALLENGES IN THE FINANCIAL SECTOR AND HOUSING AND WE'RE VERY MUCH AWARE OF THAT AND WE'RE CONCERNED ABOUT IT.

RATIGAN: HAVE YOU SEEN ANYTHING IN YOUR DATA SET OR THE DATA SET YOU'RE ABLE TO REVIEW BEYOND YOUR OFFICE EVEN THE TOTALITY OF THE INFORMATION YOU'RE ABLE TO EVALUATE THAT SUGGESTS THAT THE KNOWN WEAKNESS IN HOUSING IS IN FACT PERMEATING THE ECONOMY OR IS IT IN FACT NOT PERMEATING THE BALANCE OF THE ECONOMY?

HUBBARD: WELL THE GOOD NEWS IS SO FAR IT'S NOT PERMEATING TO THE REST OF THE ECONOMY AND I THINK THERE'S A VERY GOOD REASON FOR THAT. UNEMPLOYMENT REMAINS VERY, VERY LOW AT 4.7%. WE CONTINUE TO PRODUCE NEW JOBS AT A VERY RAPID CLIP, 166,000 IN OCTOBER AND WAGES AND COMPENSATION ARE GROWING, REAL WAGES AND REAL COMPENSATION ARE GROWING QUITE STRONGLY.THAT'S ANOTHER REPORT WE GOT LAST WEEK, SO YOU PUT THAT TOGETHER AND THAT'S WHY THE CONSUMER CONTINUES TO BE STRONG, CONSUMPTION CONTINUES TO BE STRONG AND THAT'S WHY THE REST OF THE ECONOMY CONTINUES TO BE STRONG.

RATIGAN: DO YOU HAVE A SENSE AT ALL AND I KNOW IS THERE ANYTHING THAT YOU CAN SAY TO US ON THE SUBJECT OF THE U.S. CURRENCY?

HUBBARD: NO. I LOVE THAT QUESTION BECAUSE I HAVE THE TOTAL ANSWER. I CAN'T DISCUSS IT. WHY DON'T YOU ASK ME AGAIN.

RATIGAN: I THINK WE'RE ALL ON THE SAME PAGE NOW.

HUBBARD: GOOD.

RATIGAN: I WILL ASK AGAIN THE NEXT TIME I SEE YOU, I WANT TO GIVE YOU THAT OPPORTUNITY.DO YOU HAVE ANY SENSE OF THE RISK MANAGEMENT OR FUTURE WRITEDOWNS FROM THE INVESTMENT BANKS.WHAT DID THEY TELL YOU ABOUT THEIR CURRENT UNDERSTANDING OF WHAT THEY -- OH, WE WATCHED E TRADE TODAY LOSE 2/3 OF ITS VALUE. GRANTED IT'S AN ISOLATED, ONE COMPANY, ONE SITUATION, BUT CONSIDERING WHO YOU TALKED TO TODAY BUT I'M CURIOUS WHAT THEY WERE ABLE TO TELL YOU OR WHAT YOU WERE ABLE TO FIND OUT ABOUT WHERE THEY STAND.

HUBBARD: THEY'RE ALL COMMITTED TO TRANSPARENCY TO OPENNESS, TO ADDRESSING CONCERNS AND IF THEIR ASSETS ARE OVERVALUED THEN THEY'RE REVALUING THEM AND THAT'S WHAT WE HAVE SEEN IN THE LAST FEW WEEKS AS MERRILL LYNCH AND CITIGROUP AND MORGAN STANLEY AND OTHERS HAVE MARKED DOWN PARTS OF THEIR PORTFOLIO AND THAT IS GOOD NEWS AND THAT'S WHAT MAKES THIS THE AMERICAN FINANCIAL SYSTEM SO STRONG IS THAT WE DO HAVE OPENNESS, WE DO HAVE TRANSPARENCY SO PEOPLE KNOW EXACTLY WHAT'S GOING ON.

RATIGAN: AND AS YOU SURELY KNOW, WE JUST TALKED ABOUT IT ON THE FIRST 20 MINUTES OF THE SHOW TODAY. EXPECTATIONS FOR THE CONSUMER, THIS PARTICULAR HOLIDAY SEQUENCE, THE NEXT COUPLE OF MONTHS ARE TEPID, THERE'S NOT A LOT OF OPTIMISM RIGHT NOW, EARNINGS TOMORROW NOT EXPECTED TO BE GOOD, ET CETERA, ET CETERA. WHAT IS YOUR VIEW OF -- IN OTHER WORDS HOW SERIOUSLY DO YOU AS AN ECONOMIST TAKE, BOTH THOSE EARNINGS, CONSUMER CONFIDENCE DATA, WHEN YOU SEE THIS COME IN, YOU SAY THIS IS TWO GRAINS OF SALT, THIS I REALLY NEED TO PAY ATTENTION TO?

HUBBARD: WE'RE ALWAYS CONCERNED BUT AT THE SAME TIME WE GO BACK TO THE FUNDAMENTALS WHICH ARE STRONG AND THE MOST IMPORTANT NUMBER IS THE UNEMPLOYMENT RATE AND JOB CREATION WHICH REMAINS STRONG AND SECONDLY THE GROWTH IN WAGES AND COMPENSATION WHICH IS STRONG.WE CAN'T PREDICT. WE DO OUR BEST AND WE THINK THE ECONOMY WILL CONTINUE TO EXPAND. IT'S NOT TO SAY THAT WE DON'T HAVE CHALLENGES ESPECIALLY IN THE HOUSING SECTOR.

RATIGAN: REAL QUICK TO THE TRADERS OVER THERE, I CAN'T SEE YOU GUYS, SO IT'S HARD FOR ME TO KNOW.

MACKE: MY QUESTION IS THIS, IT'S THE PROBLEM WITH THE FINANCIAL SYSTEM AND I AGREE WITH YOU IN THEORY IN TERMS OF THE JOB AND OF WAGES. BUT WE'RE SEEING CONSUMER CONFIDENCE JUST ABSOLUTELY PLUMMET. WERE SEEING THESE FINANCIAL INSTITUTIONS, THEY SIMPLY DON'T KNOW THE RISK.WHAT LEVERINGS CAN YOU GUYS PUSH AND PULL AND PROD TO DO ANYTHING ABOUT IT? THE QUESTION IS, IF YOU WANT TO BE ACTIVIST, HOW CAN YOU AS THE FEDERAL GOVERNMENT REALLY MANIPULATE OR CONTROL OR ASSUAGE OR CALM THIS PANIC THAT SEEMS TO BE GROWING IN THE FINANCIAL MARKETS?

HUBBARD: WE'RE NOT IN THE MANIPULATION BUSINESS.

MACKE:HOW CAN YOU ACTUALLY PROD THIS AND HELP IT ALONG? YOUR BUSINESS REALLY, WHAT YOU'RE TRYING TO DO IS STEM THE FLOW OF PANIC THAT YOU'RE ACTUALLY BUILDING, WHEN E TRADE GOES DOWN BY 60% IN STOCK MARKET VALUE, THAT'S A PROBLEM THAT'S LEADING TO PANIC AMONG REAL PEOPLE OUT THERE AND WHAT CAN YOU DO TO HELP?

HUBBARD: IN THE HOUSING SECTOR, AS I MENTIONED, THAT'S OUR BIGGEST CONCERN AND OBVIOUSLY OUR CONCERN IS THE INDIVIDUAL HOMEOWNER AND MAKING SURE THAT IF HE CAN AFFORD IT THAT HE STAYS IN HIS HOUSE AND THAT'S WHY HANK PAULSON AND DEPARTMENT OF TREASURY ALPHONSO JACKSON,THE SECRETARY OF HUD ARE WORKING VERY CLOSELY TOGETHER, WORKING WITH THE SERVICING COMPANY, WORKING WITH THE LENDERS TO HAVE THE HOMEOWNERS WORK WITH THEM AND ENCOURAGING THOSE LENDERS WHEN APPROPRIATE TO RENEGOTIATE THE MORTGAGES BECAUSE IT'S IMPORTANT TO KEEP THESE PEOPLE IN THEIR HOMES WHEN THEY CAN AFFORD THOSE HOMES.

RATIGAN: AND I APPRECIATE YOU POKING ME THERE WITH THE MANIPULATION COMMENT. I'LL HEAR MORE ABOUT THEM FOR MONTHS TO COME. MR. HUBBARD, A PLEASURE.THANK YOU FOR STOPPING BY.WE'RE GOING TO TAKE A BREAK HERE.




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