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CNBC Exclusive: Maria Bartiromo Speaks Exclusively to John Thain the Newly Named Chairman & CEO of Merrill Lynch on "Closing Bell w/Maria Bartiromo" (Transcript Included)

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WHEN: WEDNESDAY, NOVEMBER 14TH AT 4:00PM ET
WHERE: "CLOSING BELL W/MARIA BARTIROMO"

The following is the unofficial transcript of a CNBC exclusive interview with John Thain, the newly named Chairman & CEO of Merrill Lynch on CNBC's "Closing Bell w/Maria Bartiromo" today. All references must be sourced to CNBC.

In the exclusive interview with CNBC's Maria Bartiromo, Thain discusses when he was first approached about the position and why he chose it, whether he will look for overseas acquisitions in the near future, whether there will be more write-downs and the current state of Merrill's business, among other topics.

BARTIROMO: THANK YOU VERY MUCH. TO OUR TOP STORY OF THE DAY. OUR EXCLUSIVE INTERVIEW WE HAVE BEEN TELLING YOU, JOHN THAIN, THE CEO OF THE NEW YORK STOCK EXCHANGE MOVING OVER TO MERRILL LYNCH AS ITS NEW CHAIRMAN AND CEO.JOHN THAIN IS JOINING ME NOW IN A CNBC EXCLUSIVE.THANKS FOR JOINING ME ON THE PROGRAM.

THAIN: CONGRATULATIONS TO YOU. THANK YOU VERY MUCH. I'M EXCITED.

BARTIROMO: TELL ME HOW THIS ALL CAME ABOUT. WHEN DID THE BOARD COME THROUGH WITH THE OFFER? HOW LONG HAVE YOU BEEN CONSIDERING THIS?

THAIN: OVER THE LAST TWO WEEKS, I'VE BEEN HAVING DISCUSSIONS WITH THE BOARD. AND THIS REALLY CAME TOGETHER OVER THE WEEKEND.

BARTIROMO: YOU REALLY HAVE BEEN A CHANGE AGENT HERE AT THE NEW YORK STOCK EXCHANGE. WHEN YOU FIRST CAME IN, REPLACING DICK. NOW YOU'RE GOING TO MERRILL AT A TIME THAT WE'RE SEEING SOME DISARRAY. LET ME ASK YOU ABOUT THAT AND HOW YOU PLAN TO FIX THINGS. A LOT OF QUESTIONS TODAY WHEN THE RUMORS FIRST STARTED, THAT YOU WERE GOING OVER THERE TO TAKE THE JOB. ABOUT HOW MUCH DUE DILIGENCE IN TERMS OF WHAT ELSE IS ON THE BOOKS. WHAT CAN YOU TELL US ABOUT THAT?

THAIN: I'LL TAKE IT IN TWO PIECES. ONE IN TERM OF THE BUSINESS OF MERRILL. THE VAST MAJORITY OF MERRILL'S BUSINESSES ARE DOING GREAT. THE WEALTH MANAGEMENT BUSINESS, THE INVESTMENT BANKING BUSINESS, THE PRIVATE EQUITY BUSINESS. THE PROBLEMS ARE REALLY CONCENTRATED IN A RELEVANTLY NARROW AREA, WHICH IS FIXED INCOME PART OF IT. I'VE HAD COMPLETE ACCESS TO ALL OF THE BOOKS AND PRORDS TALK TO THEM A LOT ABOUT THEIR EXPOSURE TO THE CEO MARKETS. THE SUB PRIME MARKETS. AND THEY HAVE BEEN AS OPEN AS THEY COULD BE.

BARTIROMO: SO HOW BAD IS IT? THAT'S WHAT PEOPLE WANT TO KNOW.

THAIN: I THINK THEY TOOK A VERY CONSERVATIVE MARK AT THE END OF THE QUARTER. AND I THINK THAT FROM THEIR PERSPECTIVE, I THINK THEY REALLY DID A VERY GOOD JOB ANALYZING WHAT THEY HAD. SO I DON'T THINK THERE IS ANY ISSUE FROM THEIR PERSPECTIVE. I THINK THERE IS AN ISSUE WITH THE INDUSTRY AS A WHOLE. I THINK IT IS LIKELY THAT PRICES IN THE CDO MARKET, IN THE SUBPRIME MARKET WILL CONTINUE TO DETERIORATE OVER THE NEXT, AT LEAST THREE TO SIX MONTHS. SO THERE MAY STILL BE EXPOSURE THERE. THEY STILL DO HAVE SOME ON THEIR BALANCE SHEETS. IN TERM OF WHAT THEY DID AT THE END OF THE QUARTER, I THINK THEY DID A GREAT JOB.

BARTIROMO: CAN YOU QUANTIFY HOW MUCH MORE IS LEFT TO BE WRITTEN DOWN? IT IS HARD TO VALUE THIS, OBVIOUSLY. A LOT OF PEOPLE ARE SAYING, IS THERE AN OPPORTUNITY THAT SOME OF IT IS CASH FLOWING AND CAN BE WRITTEN UP AT SOME POINT? WE JUST DON'T KNOW. TELL ME HOW BAD IT IS IN THE COMING QUARTER.

THAIN: AGAIN, I CAN'T TELL YOU ANYTHING SPECIFICALLY MERRILL. I WOULD SAY IN THE INDUSTRY AS A WHOLE, I THINK IT IS LIKELY IT PRICES WILL DECLINE. I DON'T THINK WE'VE SEEN THE BOTTOM. I THINK OVER TIME, MANY OF THESE ASSETS WILL TURN OUT TO BE GOOD INVESTMENTS. I THINK SHORT TERM, THERE WILL BE MORE PRICE PRESSURE, MAINLY IN THE CDO MARKET.

BARTIROMO: IT IS INTERESTING WHEN YOU LOOK AT THE WAY MERRILL HAS TAKEN ON RISK IN THIS ENVIRONMENT AND THEN YOU LOOK AT YOUR OLD FIRM. GOLDMAN SACHS AND HOW SUCCESSFUL GOLDMAN HAS BEEN IN TERMS OF NAVIGATING THROUGH THIS AND TAKING ON RISKS.LEVERAGING THE BALANCE SHEET.WOULD YOU BE INCLINED TO GO TO MERRILL AND CUT, CUT, CUT, MORE WRITE-DOWNS. WOULD YOU BE INCLINED TO TAKE ON THE RISK PROFILE THAT STAN O'NEIL DID?

THAIN: I THINK YOU HAVE TO TAKE MEASURED RISKS. IT IS A TRADING ORGANIZATION. IT DOES TAKE TRADING RISKS AND I THINK THAT'S FIND. IT IS ONLY A QUESTION OF HOW YOU SIZE THAT RISK. AND I, OF COURSE, CAME FROM A PLACE THAT DOES TAKE A LOT OF RISKS BUT THEY'RE VERY MEASURED IN HOW THEY TAKE THOSE RISKS. THEY'VE DONE A GREAT JOB IN THIS ENVIRONMENT. AND AS YOU PROBABLY REMEMBER, I ACTUALLY RAN GOLDMAN'S MORTGAGE BUSINESS BACK IN THE 80s. SO THIS IS SOMETHING I KNOW PRETTY WELL. I THINK TAKING TRADING RISK IS FINE YOU JUST HAVE TO SIZE IT APPROPRIATELY.

BARTIROMO: A LOT OF PEOPLE ARE WONDERING WHY YOU CHOSE THE MERRILL LYNCH JOB. MAYBE YOU WERE OFFERED THE CITIGROUP JOB. WERE YOU ACTUALLY OFFERED THAT JOB AS WELL?

THAIN: I REALLY WANT TO FOCUS ON THE JOB I TOOK I THINK IT IS A GREAT OPPORTUNITY FOR ME.I'M EXCITED ABOUT IT. I WISH IS CITI BEST AND, AS THEY FINISH THEIR SEARCH.

BARTIROMO: EVERYBODY IS LIKE, LOOK AT THESE OPPORTUNITIES. HE COULD GO TO CITIGROUP. WERE YOU OFFERED THE POSITION?

THAIN: I'M NOT GOING TO GIVE YOU A COMPLETE ANSWER TO THAT.THEY ARE STILL IN THEIR SEARCH PROCESS.I OBVIOUSLY CHOSE TO TAKE THE MERRILL LYNCH JOB BECAUSE I THOUGHT IT WAS THE BEST ONE FOR ME.I THINK IT IS A GREAT OPPORTUNITY FOR ME AND I THINK I CAN MAKE A DIFFERENCE THERE AND I THINK IT WILL BE FUN.

BARTIROMO HOW? WHAT ARE YOU GOING TO DO?

THAIN: I THINK THAT MERRILL HAS A GREAT FRANCHISE.IT IS A FRANCHISE THAT IS ALREADY STRONG IN SO MANY AREAS AND I THINK IT CAN BE BUILT AND IMPROVED.SO I THINK IT IS MUCH MORE OF AN OPPORTUNITY TO MAKE THINGS BETTER.AND I DON'T THINK IT IS AN ISSUE OF REALLY DECONSTRUCTING OR REALLY LOOKING AT, IS THE STRATEGY GOOD?I THINK THE STRATEGY REALLY IS GOOD.

BARTIROMO: LET'S TALK ABOUT THE CULTURE OF THE BROKERS.A LOT OF TALK ABOUT THAT AND REALLY RETAINING STAFF.CLEARLY THE TURMOIL AT MERRILL HAS PUSHED PEOPLE OUT THE DOORS.HOW ARE YOU GOING TO RETAIN STAFF?DID YOU GET ANY ASSURANCES THAT YOU WILL BE ABLE TO LOCK PEOPLE UP?CLEARLY THE FIRM IS NOT IN A POSITION TO PAY FOR THE TOP TALENT.

THAIN: I DON'T THINK THAT'S RIGHT. WHENEVER YOU HAVE A FIRM THAT MUCH OF THE BUSINESS IS ACTUALLY DOING VERY WELL, AND THEN YOU HAVE ONE PART THAT'S DOING POORLY, YOU HAVE HE SHALL USE ABOUT, YOU HAVE ISSUES ABOUT HOW YOU HAVE TO CONCENTRATE.YOU HAVE TO PAY PEOPLE WHO ARE DOING WELL AND IT IS A QUESTION OF GETTING THAT BALANCE RIGHT.IN TERM OF THE WEALTH MANAGEMENT SIDE, I THINK IT WILL BE A GREAT OPPORTUNITY FOR ME TO REALLY GHETTO KNOW THEM. TO WORK WITH THEM. AND I THINK THAT WILL BE PART OF THE FUN OF THE JOB.

BARTIROMO: HAVE YOU HAD ANY ATTRACTION WITH THEM?TELL NEVER ATTRACTION YOU'VE HAD WITH EMPLOYEES OR CERTAINLY, THE BOARD?WHAT KIND OF A PROFIT HAS IT BEEN?

THAIN: THE PROCESS WAS AT THE BOARD LEVEL.ALL OF MY INTERACTION HAS BEEN AT THE BOARD LEVEL.IT HAS BEEN A VERY POSITIVE, I DIDN'T KNOW THE BOARD MEMBERS MUCH AT ALL.AND IT HAS BEEN FUN GETTING TO KNOW THEM.I LOOK FORWARD TO WORKING WITH THEM.

BARTIROMO: THE COMPANY HAS AN INTERNATIONAL BASE. LET'S TALK ABOUT THE INTERNATIONAL STORY.YOU OBVIOUSLY LED AN EXPANSION OF THE NEW YORK STOCK EXCHANGE INTERNATIONALLY.ARE YOU GOING TO NEED TO DO THAT FURTHER FOR MERRILL LYNCH?

THAIN: MERRILL HAS A GLOBAL FRANCHISE. IT ACTUALLY HAS QUITE A GOOD AND VERY COMPETITIVE GLOBAL PRESENCE.THERE ARE ALWAYS OPPORTUNITIES TO EXPAND.AND OUTSIDE THE U.S., IT IS PROBABLY GROWING FASTER AND HAS OTHER OPPORTUNITIES TO GROW IN THE U.S.BUT MERRILL HAS A GREAT GLOBAL POSITION.I THINK ALL I HAVE TO DO IS CONTINUE TO GROW THAT.

BARTIROMO: HOW WOULD YOU DO THAT? WOULD YOU LOOK TO ACQUISITIONS INTERNATIONALLY?WOULD YOU LOOK FOR GROWTH ORGANICALLY WHEN IT COMES TO THE INTERNATIONAL BUSINESS?YOU'RE COMPETING WITH GLOBAL PLAYERS.

THAIN: THAT'S RIGHT. BUT MERRILL IS A GLOBAL PLAYER. IF YOU LOOK AT MERRILL, IT HAS A GREAT FRANCHISE IN ITS WEALTH MANAGE MANY BUSINESS.IT IS A GLOBAL INVESTMENT BANK. IT IS A GLOBAL SALES AND TRADING OPERATION. AND I THINK THEY REALLY ARE ALREADY A GLOBAL PLAYER.AND I THINK IT IS MORE WHERE THERE ARE OPPORTUNITIES.I THINK IT IS TOO EARLY TO SAY WE WANT TO MAKE THE CHANGES OR NOT.

BARTIROMO: WHAT IS THE BIGGEST ATTRACTION TO GO TO MERRILL LYNCH AT THIS POINT?

THAIN: IT IS A GREAT FRANCHISE. IT HAS A GREAT POSITION IN THE MARKETPLACE.IT DOES HAVE SOME SPECIFIC PROBLEMS BUT THEY'RE PROBLEMS, I THINK, I KNOW WELL AND CAN REALLY FIX AND I THINK THERE IS A GREAT UPSIDE FOR ME AND THE COMPANY.

BARTIROMO: LET ME ASK YOU ABOUT THE COMPANY ACKNOWLEDGING THAT THERE IS AN S.E.C. INVESTIGATION.WHAT CAN YOU TELL US ABOUT THAT? SOME PEOPLE SAY THIS COMPANY IS A LOT WORSE OFF THAN SOME PEOPLE THINK.FIRST WE'LL SEE MORE SHOES DROPPED WHEN IT COME TO CEOs.THEN YOU HAVE MERRILL ACKNOWLEDGING THAT WE ACTUALLY ARE SEEING FEDERAL REGULATORS INVESTIGATING HOW THE SUB PRIME VULNERABILITY WAS ACTUALLY HIDDEN.

THAIN: I TALKED TO THEM ABOUT THAT. BACK IN THE VERY EARLY STAGES. I DON'T THINK EITHER THEY OR ANYONE REALLY KNOWS WHERE THAT GOES.IT IS A VERY NORMAL THING FOR THE S.E.C. TO INVESTIGATE WHENEVER THERE IS SIGNIFICANT ISSUES. AND SO I DON'T THINK THERE IS ANYTHING SPECIAL TO THAT. AT LEAST RIGHT NOW.

BARTIROMO: SO MANY PEOPLE HAVE BEEN TALKING ABOUT THE TROUBLES AT MERRILL LYNCH.YOU'RE TALKING ABOUT THE OPPORTUNITIES OF THIS GLOBAL FRANCHISE IN PLACE. HOW DO YOU GET AROUND THE FACT THAT YOU ARE GOING TO SEE FURTHER WRITE-DOWN IN THE NEXT COUPLE QUARTERS?

THAIN: AGAIN, I DIDN'T SAY THAT THERE WILL NECESSARILY BE FURTHER WRITE-DOWNS. BUT I THINK IN THE INDUSTRY AS A WHOLE, PRICES ARE PROBABLY STILL GOING TO BE UNDER PRESSURE. I THINK THAT'S POSSIBLE. BUT AGAIN, THAT IS A NARROW PART OF THEIR BUSINESS. THE CORE OF THEIR BUSINESS, THE VAST MAJORITY IS DOING GREAT.

BARTIROMO: WOULD YOU BE INCLINED TO GET OUT OF THAT PART OF THE BUSINESS?

THAIN: NO. I THINK THAT THE MORTGAGE BUSINESS, THEY'RE ALL VERY GOOD AND ATTRACTIVE BUSINESSES WHERE YOU CAN HAVE VERY GOOD RETURNS.WE HAVE TO MANAGE THE RISKS.

BARTIROMO: LET ME ASK BUT THE NEW YORK STOCK EXCHANGE.YOU HAVE CLEARLY LED AN AMAZING EXPANSION HERE AND YOU HAVE HAD GREAT EXPANSION HERE.

THAIN: WHEN I CAME HERE, I SAID I THOUGHT IT WAS A THREE TO FIVE-YEAR JOB.WE'VE MADE A HUGE AMOUNT OF PROGRESS.WE'VE BECOME A PUBLIC COMPANY.WE'VE REALLY BECOME THE LEADING.I THINK OUR POSITION IN EUROPE IS BY FAR THE BEST IN THE WORLD. I THINK WE'RE IN VERY, VERY GOOD SHAPE.THERE ARE ALWAYS MORE TO DO AND THERE ARE THINGS THAT NEED TO BE DONE HERE. BUT I THINK I CAN LEAVE A GOOD CONDITION.

BARTIROMO: DUNCAN WILL TAKE OVER FOR YOU.

THAIN: THEY HAVE MEETINGS TALKING ABOUT THAT.

BARTIROMO: SO YOU HAVE NOT OFFICIALLY ANNOUNCED THAT.BUT THE BOARD IS MEETING ON IT AND IT IS LIKELY. THAT'S WHAT THE THINKING IS THAT HE WILL BECOME THE CEO.

THAIN: THAT'S THE RUMOR MILL.

BARTIROMO: IT IS PRETTY EXTRAORDINARY, WHAT YOU HAVE OVERSEEN AT THE EXCHANGE.NOT ONLY THIS EXCHANGE BUT THE GLOBAL EXCHANGES.DO YOU SPECK WE WILL SEE FURTHER CONSOLIDATION AROUND THE WORLD?

THAIN: YEAH, I DO. WE REALLY SET THE MODEL OF BUILDING A GLOBAL MULTIPRODUCT EXCHANGE GROUP. AND THERE WILL PROBABLY BE THREE OR FOUR OTHER BUNS WILL COMPETE. AND I THINK THAT YOU'RE STARTING TO SEE THOSE DEVELOP. BUT THEY'RE AT A MUCH EARLIER STAGE THAN WHAT WE'RE AT. I THINK THAT WHETHER IT IS NASDAQ, OF COURSE, THE ISE.THOSE ARE REALLY THE BEGINNINGS. WE'RE MUCH FARTHER ALONG. WE HAVE A MUCH BROADER PART.

BARTIROMO: A LOT OF PEOPLE WONDER IF THE COMPANY IS STILL WANTING TO GET IN FURTHER INTO THE DERIVATIVES BUSINESS NOW THAT YOU'LL BE LEAVING. WHERE DOES THAT STAND?

BARTIROMO: I DON'T THINK THE STRATEGY GOING TO CHANGE AT ALL. I THINK THAT THE LEADERSHIP TEAM IS HERE, THEY WILL CONTINUE. I THINK THAT THE NYSE IS VERY WELL POSITIONED. YOU START THE NEW JOB DECEMBER 1?

THAIN: CORRECT.

BARTIROMO: WHAT IS THE NUMBER ONE THING ON JOHN THAIN'S AGENDA WHEN YOU GET TO MERRILL LYNCH?

THAIN: THE FIRST THING TO DO IS REALLY GET TO KNOW THE PEOPLE. I'LL SPEND A LOT OF TIME WITH THE PEOPLE. OBVIOUSLY FOCUSING ON SOME OF THE NEAR TERM SITUATIONS BUT I WILL SPEND A LOT OF TIME GETTING TO KNOW THE PEOPLE.

BARTIROMO: WHO WOULD YOU SEE OUT THERE IN REALLY CROWDED LANDSCAPE AS THE BIGGEST COMPETITOR RIGHT NOW TO MERRILL LYNCH?

THAIN: I DON'T KNOW ABOUT THE BIGGEST.I THINK IT DEPENDS ON WHICH AREA.MERRILL LYNCH HAS THE BEST WEALTH MANAGE MANY FRANCHISE IN THE WORLD. IT CERTAINLY COMPETES WITH THE OTHER BIG BANKS AND SALES AND TRADING BUSINESS. SO WHETHER IT IS MORGAN STANLEY, IN TERMS OF UP MANAGEMENT, THEY'RE REALLY THE BEST.

BARTIROMO: HOW AMAZING FOR YOU. YOU YOU HAVE THIS CAREER. YOU LOOK BACK AND YOU WERE AT GOLDMAN SACH. AND THEN NEW YORK STOCK EXCHANGE AND NOW MERRILL LYNCH. HOW ARE YOU FEELING?

THAIN: IT SHOULD BE FUN AND I'M VERY, VERY EXCITED. IT IS SO GOOD TO HAVE YOU ON THE PROGRAM.THANKS SO MUCH. THE NEWLY NAMED CHAIRMAN CEO OF MERRILL LYNCH.




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