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CNBC Exclusive: CNBC's Maria Bartiromo Sits Down with Hank Greenberg Chairman & CEO CV Starr & Co. on CNBC's "Closing Bell with Maria Bartiromo" (Transcript Included)

When: June 9th at 4:40PM ET
Where: CNBC's "Closing Bell with Maria Bartiromo"

Following is the unofficial transcript of a CNBC EXCLUSIVE INTERVIEW with Hank Greenberg, Chairman & CEO CV Starr & Co. today on CNBC's "Closing Bell with Maria Bartiromo."

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



Maurice "Hank" Greenberg
AP
Maurice "Hank" Greenberg

BARTIROMO: WELCOME BACK. AIG FACING MORE CRITICISM AFTER THE FIRM POSTED TWO STRAIGHT QUARTERLY LOSSES.AIG IS REAFRMING ITS SUPPORT FOR SULLIVAN SAYING TODAY, HIS 37 YEARS AT AIG HAVE POSITIONED HIM AT AS THE EXECUTIVE WHO CAN SUCCESSFULLY NAVIGATE THE

ORGANIZATION THROUGH THESE CHALLENGING TIMES AND GET THINGSDONE. JOINING ME NOW IS SULLIVAN'S PREDECESSOR HANK GREENBERG. NICE TO HAVE YOU ON THE PROGRAM.

GREENBERG: GOOD TO SEE YOU.

BARTIROMO: LET'S TALK ABOUT THE NEWS OF THE DAY AND THAT'S LEHMAN BROTHERS. HAVE YOU COMMITTED TO BE AN INVESTOR IN LEHMAN?

GREENBERG: YES, WE HAVE.

BARTIROMO: HOW BIG OF A STAKE ARE YOU TAKING IN LEHMAN?

GREENBERG: PRETTY GOOD SIZE STAKE AND I'M COMFORTABLE WITH IT. I THINK LEHMAN IS A VERY GOOD FRANCHISE.I THINK THEY'VE DONE AGREAT DEAL TO REDUCE THEIR LEVERAGE. I THINK THEY'LL DO FINE.

BARTIROMO: SO YOU'RE NOT WORRIED ABOUT SOME OF THE ISSUES OF THE DAY WITH ALL OF THESE WRITE-DOWNS THAT THE COMPANY IS GOING TO HAVE AND THE FACT THAT IT IS LOSING MONEY IN THE SECOND QUARTER, CERTAINLY?

GREENBERG:YEAH, LOOK. YOU CAN'T FORETELL WHETHER THERE WILL BE MORE WRITE-DOWNS GOING FORWARD. I THINK THEY'VE DONE A GOOD JOB CONSERVATIVELY MARKING DOWN THE THINGS THAT SHOULD BE MARKED DOWN. WILL THERE BE FURTHER MARK DOWNS? POSSIBLY. BUT NOT SUCH THAT IT WOULD HARM THE COMPANY.

BARTIROMO: AND THE LAST TIME WE SPOKE YOU SAID THAT YOU WERE LOOKING FOR OPPORTUNITIES IN FINANCIAL SERVICES.IS THIS SOMETHING THAT YOU DECIDED TO DO OR DID THEY COME TO YOU SAYING, WE'RE LOOKING FOR FURTHER RECAP IN.

GREENBERG: IT'S A COMBINATION, I THINK.DICK HAD A RAISE IN CAPITAL.I MEAN, HE WAS PRACTICAL ABOUT THAT. HE KNEW THEY WERE GOING TO HAVE A LOSS. HE THOUGHT THAT RATINGS RAISING ADDITIONAL CAPITAL WOULD CALM THINGS DOWN. I THINK HE'S RIGHT. HE RAISED MORE THAN HE NEEDED. HE'S IN A PRETTY GOOD POSITION GOING FORWARD.

BARTIROMO: WHEN YOU SAY YOU HAVE COMMITTED, DID YOU BUY INTO THE OFFERING TODAY OR DID YOU -- HOW SPECIFICALLY ARE YOU INVESTING IN LEHMAN?

GREENBERG: WE DID DUE DILIGENCE OVER THE WEEKEND. WE HAD A TEAM IN THERE. AND WE COMMITTED THEN.

BARTIROMO: LET ME ASK YOU ABOUT SOME OF THE SHORT TELLING GOING ON WITH LEHMAN. WHAT DO YOU THINK, AS NOW AN INVESTOR IN LEHMAN, WHEN YOU SEET HE NOISE AROUND THE CORNER, DO YOU THINK THERE'S BAD INFORMATION OUT THERE? IS THIS WARRANTED IN TERMS OF QUESTIONS ABOUT DISCLOSURE?

GREENBERG: LOOK, I THINK THAT -- I THINK THAT DICK FOLD IS A VERY, VERY GOOD AND HONORABLE MANAGER AND I THINK WHAT HE REPORTED TODAY, I THINK TOOK CARE OF ALL OF THE ISSUES THAT HE'S AWARE OF OR THE COMPANY IS AWARE OF. CAN MORE COME OUT IN THE FUTURE? THAT'S POSSIBLE.BUT I DON'T THINK AT ANY DEGREE THAT WOULD HARM THE LONG-TERM BENEFITS OF THAT ORGANIZATION.

BARTIROMO: ANY OTHER FINANCIAL SERVICES COMPANIES YOU THINK ARE INTRIGUING RIGHT NOW IN THIS UPSET?

GREENBERG: WELL, A NUMBER OF THEM THAT I THINK WILL BE PRETTY SOON. WE'RE LOOKING AT THEM PRETTY HARD. NOT ONLY HERE BUT INTERNATIONALLY.

BARTIROMO: AND I KNOW YOU'VE BEEN TRAVELING AROUND THE WORLD. I WANT TO ASK YOU ABOUT THAT. BUT LET ME MOVE ON TO AIG NOW. OBVIOUSLY THIS BIG SHAREHOLDER'S LETTER THAT WE READ ABOUT TODAY IN THE JOURNAL AND THE CONTINUED UPSET WITH WHICH YOU'VE BEEN SO VOCAL ON, TELL ME HOW YOU BELIEVE THAT THINGS SHOULD CHANGE AT AIG TODAY.

GREENBERG: LOOK, I THINK THE COMPANY IS FALLING APART.THE PRICE OF THE STOCK IS VERY CLEAR.THE STOCK IS DOWN, YOU KNOW, CLOSE TO, WHAT, ABOUT 60, $70 BILLION SINCE I LEFT THE COMPANY. IF YOU TELL ME THAT'S GOOD MANAGEMENT, THEN I DON'T KNOW MUCH ABOUT MANAGEMENT. LOOK, I THINK MY VIEW OF THE BOARD OF DIRECTORS HAS GOT TO BE CHANGED AND MANAGEMENT HAS GOT TO BE CHANGED. SHAREHOLDERS ARE FED UP.

BARTIROMO: SO YOU WANT MARTIN SULLIVAN OUT?

GREENBERG: I THINK THE COMPANY HAS GOT TO CHANGE ITS BOARD AND MANAGEMENT.

BARTIROMO: HOW DID THEY MISS IT? WE'RE TALKING ABOUT THE COMPANY'S RECORD QUARTERLY LOSSES TOTALLING $13 BILLION IN TWO CONSECUTIVE QUARTERS.THAT'S ALMOST AS MUCH AS THE COMPANY MADE, RIGHT, IN ALL OF '06?

GREENBERG: THAT'S EXACTLY RIGHT. LOOK, WHEN I WAS AT THE COMPANY, I THINK WE HAD WE HAD ABOUT A 10% DEBT TO EQUITY. AS I UNDERSTAND IT NOW, THEY HAVE OVER 100% DEBT TO EQUITY.THAT'S STARTLING.

BARTIROMO: HAVE YOU SPOKEN TO THE OTHER SHAREHOLDER THAT WAS OBVIOUSLY A LONG-TIME ASSOCIATE OF YOURS AS WELL AS BILL MILLER OF BLACK MASON? HAVE YOU DISCUSSED DOING A SPECIAL MEETING?

GREENBERG: NO, I HAVEN'T SPOKEN WITH THE SHAREHOLDERS.

BARTIROMO: WOULD YOU LIKE TO SEE A SPECIAL MEETING OF SHAREHOLDERS?

GREENBERG: I WOULD LOVE TO SEE A SPECIAL MEETING OF SHAREHOLDERS.

BARTIROMO: WELL, TELL ME A LITTLE BIT ABOUT WHAT YOU'D LIKE TO SEE CHANGED AWAY FROM THE BOARD AND MANAGEMENT BEING ERASED.

GREENBERG: AS I SAID IN THE LETTER TO THE BOARD, IN THE LAST THREE YEARS, THEY HAD A 24,000 PEOPLE ADDED TO THE COMPANY.THAT'S TWO U.S. ARMY DIVISIONS. I MEAN, THAT MAKES NO SENSE. I MEAN, IT JUST MAKES NO SENSE WHATSOEVER. IN THE MEANTIME, THE BOARD TRIPLED, WHILE THIS IS ALL GOING ON, THE BOARD TRIPLED ITS FEES TO THE DIRECTORS. WELL, THIS WHILE THIS IS ALL GOING ON. YOU CAN GO ON AND ON AND ON. THE RESULTS SPEAK FOR THEM -- AND IT'S NOT JUST AIG FINANCIAL PRODUCTS THAT HAS CAUSED THESE LOSSES.LOOK WHAT IS HAPPENING TO THE BASIC BUSINESS.

BARTIROMO: UH-HUH.

GREENBERG: THAT'S UNRAVELING IN MANY OF THE BASIC BUSINESSES.

BARTIROMO: THE COMPANY MIGHT SAY LOOK THIS IS AN ENVIRONMENT THAT WE'RE PRESSURED ALONG WITH OTHER FINANCIAL SERVICES BUSINESSES. IS THERE ANY SORT OF VALIDITY TO THE IDEA THAT IN THIS ERA OF THIS LOSSES AND WRITE DOWNS BECAUSE OF THE MORTGAGE PORTFOLIO DERIVATIVES THAT THEY ARE ALSO SORT OF BUNDLED IN THAT? OR IS THIS SPECIFIC TO WHAT IS HAPPENING AT AIG AND THE MANAGEMENT OPERATING THE COMPANY?

GREENBERG: FIRST OF ALL, YOU HAVE TO MANAGE A PORTFOLIO. YOU DON'T JUST TAKE A PORTFOLIO, FINANCIAL PRODUCTS, AND PUT IT IN THE SAFE AND LOCK IT. YOU MANAGE IT DAY TO DAY. AND YOU HEDGE. YOU DON'T JUST BUILD IT UP AS IF -- AND THERE'S NO RISK MANAGEMENT. WHERE'S THE RISK MANAGEMENT THAT'S SUPPOSED TO BE LOOKING ATOVERINVESTING IN A PARTICULAR AREA.AND IN ADDITION TO THAT, THE BASIC BUSINESS IS SHOWING WEAKNESS. EXPENSE RATIO WENT WAY UP IN THE GENERAL INSURANCE AREA. LIFE INSURANCE IN ASIA, WHICH IS ONE OF THE CROWN JEWELS OF THE COMPANY DID NOT DO WELL. INVESTMENT SIDE DID NOT DO WELL. CONSUMER FINANCE DID NOT DO WELL.

BARTIROMO: WELL, THE CEO OF MANAGEMENT OR THE BOARD, HOW DID HE MISS ALL OF THIS FOR SO LONG?

GREENBERG: THAT'S VERY -- THAT'S THE QUESTION? THAT'S THE QUESTION.

BARTIROMO: ARE THERE CANDIDATES THAT YOU CAN EYE THAT YOU'D LIKE TO SEE IN THERE IN THE MANAGEMENT SUITE?

GREENBERG: THAT WOULD BE UP TO THE BOARD OF DIRECTORS.

BARTIROMO: WOULD YOU GO BACK?

GREENBERG: I WOULDN'T GO BACK AS AN OFFICER OR DIRECTOR BUT I WOULD HELP ANYBODY WHO DOES GO BACK IN.

BARTIROMO: LET ME SWITCH GEARS AND TALK ABOUT YOUR TRAVELS RECENTLY, HANK. YOU OBVIOUSLY KNOW WHAT'S GOING ON AROUND THE WORLD. WE ARE TALKING ABOUT THE ECONOMIC SLOW-DOWN IN THE U.S.HOW DO YOU SEE THINGS ECONOMICALLY GLOBALLY?

GREENBERG: I THINK CHINA WILL SLOW DOWN TO 8 TO 9%, WHICH IS A STRONG GROWTH.

BARTIROMO: IS THAT GOING TO HAVE A RELATIONSHIP HE WILL EFFECT RIPPLE EFFECT IF?

GREENBERG: YEAH I THINK IT WILL HAVE SOME SLOWDOWN IN THE REST OF THE WORLD BUT NOT GREAT. I THINK THAT THERE WILL BE -- THERE'S SOME DISCONNECT BUT NOT TOTALLY. BUT ENERGY PRICES ARE HURTING EVERYTHING WORLDWIDE. NOT JUST IN THE UNITED STATES.

THAT IS A PROBLEM FOR EVERYBODY. INFLATION IS KICKED UP IN CHINA AND OTHER PLACES. AND SO RUSSIA INFLATION IS JUST VERY VERY HIGH ALTHOUGH THE ECONOMY IS DOING BETTER, INFLATION IS VERY HIGH.

BARTIROMO: AND YOU'RE EXPERIENCING THAT FIRSTHAND HAVING INVESTED IN REAL ESTATE IN RUSSIA?

GREENBERG: YEAH.BUT THERE'S BIG OPPORTUNITIES ASWELL. AND SO, YOU KNOW, I'M NOT PESSIMISTIC.LOOK, WE'LL GROW OUT OF THIS AND IT'S NOT GOING TO HAPPEN RIGHT AWAY.I THINK WE ARE IN A RECESSION.

BARTIROMO: WHAT CAN BE BEST FOR THE ECONOMY CANDIDATE?

GREENBERG: I THINK McCAIN.

BARTIROMO: WHY?

GREENBERG: I THINK HE'S GOT EXPERIENCE, BOTH IN THE FOREIGN AFFAIRS.HE'LL SURROUND HIMSELF WITH -- AND HE KNOWS PEOPLE SAY HE

DOESN'T KNOW VERY MUCH ABOUT ECONOMICS. I THINK HE DOES. HE'LL HAVE A PRETTY GOOD ENERGY PROGRAM. HE'S NOT GOING TO RAISE TAXES.AND WHICH WOULD BE THE WORST THING FOR THE ECONOMY TO DO. I THINK HE'S GOT -- I THINK HE'S GOT THE RIGHT STRATEGIES.

BARTIROMO: HANK, NICE TO HAVE YOU ON THE PROGRAM.

GREENBERG: THANK YOU.




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