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BREAKING NEWS: CNBC'S STEVE LIESMAN REPORTS FIRST COMMENTS REGARDING THE GOVERNMENT PLAN FROM FORMER FEDERAL RESERVE CHAIRMAN ALAN GREENSPAN

WHEN: TODAY, FRIDAY, SEPTEMBER 19TH AT 4:00PM ET

WHERE: CNBC'S "CLOSING BELL WITH MARIA BARTIROMO

Following is the unofficial transcript of CNBC's Breaking news on Former Federal Reserve Chairman Alan Greenspan.

All references must be sourced to CNBC.

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BARTIROMO: TO YOU WITH SOME BREAKING NEWS ON ALAN GREENSPAN, TELL US.

LIESMAN: YES THANK YOU MARIA. I JUST HAD A CONVERSATION NOT TOO LONG AGO WITH THE FORMER FEDERAL RESERVE CHAIRMAN ALAN GREENSPAN AND HE SAYS TO ME THE GOVERNMENT PLAN IS A NECESSARY ACTION SO THE FIRST COMMENTS BY THE FORMER FED CHAIRMAN ON THIS PLAN THAT CAME OUT. HE SAID HANK PAULSON AND BEN BERNANKE HAVE MY FULL SUPPORT IN THIS. HE DID HOWEVER QUALIFY. HE SAID "THE ONLY QUALIFICATION THAT IS CRITICAL IS THAT IT BE TEMPORARY, THAT AFTER THE CRISIS IS COVER WE HAVE TO UNWIND THE SYSTEM. THIS IS A ONCE-IN-A-CENTURY EVENT THAT REQUIRED AN EXTRAORDINARY REACTION." NOW SPEAKING ABOUT WHAT BOB PISANI WAS TALKING ABOUT ALL THE CONTROVERSY REGARDING THAT BAN ON SHORT SELLING MR. GREENSPAN CALLED IT A TERRIBLE IDEA. HE SAID PEOPLE DON'T REALIZE SHORT SELLING HAD A VERY IMPORTANT ROLE IN THE MARKET IN SETTING PRICES AGAIN HE CALLED IT A TERRIBLE IDEA. EXPLAINING WHY IT ALL NEEDED TO BE DONE MR. GREENSPAN SAID "NOBODY LIKES TO DO SOMETHING LIKE THIS BUT WE GOT TO THE POINT WHERE WE MORPHED FROM A LIQUIDITY TO A SOLVENCY PROBLEM." TALKING ABOUT THE BANKING SYSTEM BEING ON THE BRINK. HE SAID WE WENT FROM "IRRATIONAL EXUBERANCE TO DEEP FEAR." MR GREENSPAN SAID HE THOUGHT THAT COMPANIES THAT GAVE MORTGAGE BACK SECURITIES TO THE GOVERNMENT SHOULD ALSO HAVE TO ISSUE WARRANTS TO THE GOVERNMENT "YOU CANNOT BAIL OUT COMPANIES" HE SAID. ON THE ECONOMY THE FORMER FED CHAIRMAN SAID IT WAS NOW A RACE "CAN WE SOLVE THE FINANCIAL CRISIS BEFORE MAJOR NEGATIVE EFFECTS SET IN? I JUST CANNOT ANSWER THAT QUESTION." HE SAID GLOBAL FLEXIBILITY HAD KEPT THE ECONOMY OUT OF RECESSION SO FAR BUT JUST COULD NOT BE CERTAIN IT WOULD OVERCOME THE THREAT FROM THE FINANCIAL CRISIS.





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