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CNBC EXCLUSIVE: CNBC TRANSCRIPT:CNBC'S MARIA BARTIROMO INTERVIEWS KEN LEWIS, PRESIDENT, CHAIRMAN,& CEO, BANK OF AMERICA TODAY ON "THE CALL"

WHEN: Today, Friday, February 6th

WHERE: CNBC'S "The Call"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview Bank of America President, Chairman & CEO Ken Lewis today on CNBC's "The Call." More of Maria Bartiromo's interview with Ken Lewis will air on "Closing Bell" 3-5PM ET today.

All references must be source to CNBC.

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MARIA BARTIROMO: KEN, NICE TO HAVE YOU ON THE PROGRAM. THANKS FOR SPENDING THE TIME.

KEN LEWIS: THANKS, GOOD TO BE HERE MARIA.

BARTIROMO: LET ME GET RIGHT TO SOME OF THE EXTRAORDINARY THINGS THAT HAVE BEEN HAPPENING AT B OF A, AS WELL AS FOR THE ENTIRE INDUSTRY, AND, OF COURSE, THAT INCLUDES RECEIVING GOVERNMENT MONEY. YOU HAVE RECEIVED $45 BILLION FROM THE GOVERNMENT TAXPAYER MONEY. HOW WILL YOU BE ABLE TO OPERATE THE COMPANY THE WAY YOU WANT TO OPERATE IT EFFECTIVELY WHEN THE GOVERNMENT OWNS A STAKE IN THE COMPANY AND IS QUESTIONING SOME OF YOUR DECISIONS?

LEWIS: WELL, I DON'T THINK IT WILL CHANGE HOW FUNDAMENTALLY WE RUN THE COMPANY, BUT OBVIOUSLY WITH SOME OF THE SECOND-GUESSING, ET CETERA, THE DEGREE OF DIFFICULTY IS HEIGHTENED AT A TIME YOU WOULDN'T WANT TO IT TO HEIGHTEN, BUT FUNDAMENTALLY WE HAVE THE LEEWAY TO RUN THIS COMPANY THE WAY WE WANT TO.

BARTIROMO: SO YOU'RE COMFORTABLE WITH $500,000 CAPS ON SALARY, THE DIVIDEND WHERE IT IS?

LEWIS: WELL, I DON'T FEEL GOOD ABOUT THE $500,000 CAP AND IT'S NOT ME. I WILL TAKE $500,000, AND EVEN MY MANAGEMENT TEAM, BECAUSE WE AS A TEAM WOULD OPERATE THAT WAY UNTIL WE GOT THE T.A.R.P. MONEY OUT OF THE BANK. HOWEVER, BEYOND THE TOP MANAGEMENT TEAM, WHEN YOU'RE TALKING ABOUT 20 OR 30 OTHERS WHO CAN GO TO FOREIGN BANKS, WHO CAN GO TO OTHER ASSET MANAGEMENT COMPANIES, ET CETERA, THAT'S A PROBLEM.

BARTIROMO: SO WHAT ARE YOU GOING TO DO? HOW ARE YOU GOING TO ASSURE THOSE PEOPLE THAT YOU SUPPORT THEM AT B OF A AND THAT YOU WILL MAKE UP FOR THAT IN SOME WAY? HOW ARE YOU GOING TO KEEP TALENT?

LEWIS: I HOPE, FIRST OF ALL, THAT SOMEBODY WILL STEP BACK AND GIVE SOME THOUGHT TO THIS, TO NOT GO THAT FAR, AND SECONDLY, WE'LL JUST HAVE TO REGROUP AND SEE. I DON'T ACTUALLY HAVE AN ANSWER TO THAT BECAUSE THIS HAS JUST COME UP IN THE LAST DAY OR SO.

BARTIROMO: WE HAD A POSITIVE RECOMMENDATION ON YOUR STOCK TODAY SO THE STOCK IS DOING WELL, BUT OBVIOUSLY IT'S BEEN A TOUGH SITUATION FOR B OF A SHARES. DOWN 65% IN 2009 ALREADY. DOWN ALMOST 90% OVER THE LAST 52 WEEKS. TELL ME ABOUT THE WORRY ABOUT NATIONALIZATION. HAVE YOU SPOKEN WITH GOVERNMENT OFFICIALS ABOUT GETTING NATIONALIZED?

LEWIS: WELL, FIRST, LET'S TALK ABOUT THE INDUSTRY AND THEN BANK OF AMERICA BECAUSE IT SEEMS TO BE AN ISSUE WITH THE INDUSTRY AS WELL. I HAVE TALKED TO GOVERNMENT OFFICIALS, MEMBERS OF CONGRESS, REGULATORS, AND NO ONE HAS EVER SAID THAT THEY THOUGHT NATIONALIZATION WAS THE WAY TO GO OR WAS LIKELY TO HAPPEN. THEN YOU TAKE IT EVEN ONE STEP FURTHER WITH BANK OF AMERICA, IT BECOMES ABSURD. I HAVE NEVER HAD ANYBODY HINT AT IT, AND WHAT IT APPEARS TO BE ARE A BUNCH OF MALICIOUS RUMORS, BUT I PERSONALLY HAVE NEVER HAD ANYBODY EVEN REMOTELY TALK ABOUT NATIONALIZATION AS A POSSIBILITY.

BARTIROMO: SO WHERE DO YOU THINK THEN THIS IS COMING FROM? HOW BIG OF A STAKE WILL THE GOVERNMENT TAKE IN B OF A?

LEWIS: WELL, I DON'T KNOW WHAT'S GOING TO HAPPEN ON MONDAY WHEN THE NEW T.A.R.P. MONEY IS EXPLAINED, SO I DON'T KNOW, BUT ALL I KNOW IS THAT WE'RE GOING TO BE FOCUSED ON MAKING MONEY AND GETTING IT PAID BACK AS SOON AS HUMANLY POSSIBLE.

BARTIROMO: WHEN WILL THAT BE DO YOU THINK? THREE YEARS?

LEWIS: WE HOPE WITHIN THREE YEARS WE COULD PAY ALL OF IT BACK, YES, BUT I DON'T KNOW, BUT THAT WOULD BE THE OBJECTIVE.

BARTIROMO: LET ME TURN TO THE ACQUISITION OF MERRILL LYNCH. YOU AGREED TO ACQUIRE MERRILL DURING AN EXTREMELY DISTRESSED MOMENT IN TIME. LEHMAN BROTHERS HAD FILED FOR BANKRUPTCY THAT SEPTEMBER 15th WEEKEND, BUT YOU PAID A PREMIUM. A LOT OF PEOPLE WERE SHOCKED THAT YOU WERE WILLING TO PAY $29 A SHARE FOR MERRILL LYNCH IN AN ENVIRONMENT WHERE JAMIE DIMON, JPMORGAN HAD GOVERNMENT HELP, WAS CLOSE TO PAYING $2 A SHARE FOR BEAR STEARNS, ULTIMATELY $10 A SHARE. WHAT WAS THE RUSH TO DO THAT DEAL AT THAT PRICE?

LEWIS: THERE WERE OTHERS THAT WANTED TO MAKE INVESTMENTS IN MERRILL DURING THAT WEEKEND, AND SO WE KNEW THAT IF WE JUST LET IT GO THAT POSSIBLY OTHERS WOULD ACTUALLY HAVE IT, AND EVEN NOW ON A LONGER TERM BASIS, THAT BRAND HAS STILL A LOT OF VALUE, DID A LOT OF THINGS FOR OUR COMPANY ON THE FINANCIAL ADVISERS SIDE AND ON THE INTERNATIONAL SIDE IN ADDITION TO GLOBAL EQUITIES AND SO EVEN WITH ALL OF THE THINGS THAT HAVE HAPPENED, THAT'S GOING TO PROVE TO BE A GOOD ACQUISITION OVER TIME.

BARTIROMO: BUT IS IT FAIR TO SAY YOU OVERPAID?

LEWIS: MY COMMENT TO THAT WOULD BE ANYTHING OVER THE LAST 18 MONTHS YOU COULD PROBABLY MAKE THAT CASE OVER THE SHORT TERM.

BARTIROMO: CLEARLY, THE LOSSES AT MERRILL HAVE BEEN STUNNING. FIFTEEN BILLION DOLLARS IN THE FOURTH QUARTER ALONE. ONCE YOU SAW THE LOSSES PILING UP HOW DID IT HAPPEN THAT YOU ACTUALLY PULLED THE TRIGGER? INVESTORS WANT TO KNOW, WHAT WERE YOU THINKING WHEN YOU ALLOWED THIS DEAL TO GO THROUGH?

LEWIS: WELL, THE LOSSES BEGAN TO REALLY ACCELERATE IN THE KIND OF MID TO LATE PART OF THE OF THE MONTH OF DECEMBER. NOVEMBER WAS BAD, BUT NOVEMBER WAS BAD FOR MOST EVERY COMPANY THAT WAS IN THE BUSINESS. AND THERE WAS A POINT IN MID TO LATE DECEMBER THAT WE SAID, "HEY, THINGS ARE ACCELERATING, SO WE NEED TO WE NEED TO CALL THE MAC(UNINTEL PHRASE) ADVERSE CHANGE." AND WE WENT TO THE TREASURY AND THE FED AND TALKED TO THEM ABOUT THAT. AND WE JOINTLY CONCLUDED THAT IT WOULD POSE SOME SYSTEMIC RISK. THAT THE DEAL NOT TO GO THROUGH. IT WAS SO LARGE. THEY PROMISED TO ASSIST US IN GETTING IT DONE, AND FILLING THE BUCKET OF CAPITAL THAT WAS TAKEN AWAY BY THE LOSS. AND AT THE END OF THE DAY, WE THOUGHT IT WAS IN OUR BEST INTEREST, AND THE COUNTRY'S BEST INTEREST, TO GO AHEAD WITH IT, BECAUSE WE STILL SAW THE LONG TERM STRATEGIC BENEFITS. AND WE THOUGHT THE DISRUPTION CAUSED BY NOT DOING IT JUST OUTWEIGHED CALLING THE MAC.

BARTIROMO: SO THE MAC, MATERIAL ADVERSE CHANGE, I MEAN, WE DID SEE MATERIAL CHANGES IN THE MARKET. YOU DID TRY TO GET OUT OF THIS DEAL. YOU CALLED PAULSON. YOU WENT TO WASHINGTON. YOU HAD THIS DISCUSSION. DID THEY ENCOURAGE YOU? DID THEY SAY, "NO, NO, NO, YOU CAN'T WALK AWAY FROM THIS DEAL"?

LEWIS: THEY SAID, "WE STRONGLY ADVISE YOU THAT IT IS NOT IN YOUR BEST INTEREST OR THE COUNTRY'S BEST INTEREST TO WALK AWAY FROM THIS." AND THAT "TOO MUCH DAMAGE WILL BE DONE TO THE INDUSTRY, TO THE COUNTRY AND TO YOU." AND SO IT GOT TO BE, IN SOME WAYS, ENLIGHTENED SELF INTEREST. BECAUSE WE'RE SO INEXTRICABLY TIED IN WITH THE US ECONOMY AND HAVE SUCH LARGE MARKET SHARES, THAT WHAT'S GOOD FOR AMERICA IS GOOD FOR BANK OF AMERICA.

BARTIROMO: BUT DID YOU FEEL STRONG ARMED? I MEAN, DID THEY SAY, "LOOK, WE MAY TAKE YOU OUT OF A JOB"?

LEWIS: THERE'S A CUSTOMARY WAY THEY - THE FED, IN PARTICULAR, CAN CALL A CEASE AND DESIST. AND TAKE MANAGEMENT OUT, DIRECTORS OUT. BUT THAT, I PROMISE YOU, THAT THAT WAS NOT A FACTOR IN THIS. THIS WAS ABOUT THEIR ADVICE. AND THEN, AS WE REFLECTED ON IT WE AGREED THAT IT WAS THE RIGHT THING TO DO. AND SO, FOR THAT, THEY PROMISED AGAIN, AS I SAID, TO FILL THAT BUCKET.

BARTIROMO: HOW DID THE FIRM LOSE SO MUCH MONEY IN THE FOURTH QUARTER? YOU KNOW, THERE'S A DEBATE ON WHERE THESE LOSSES CAME FROM. WHETHER THESE WERE NEW POSITIONS. JOHN THAIN TOLD ME LAST WEEK THAT THESE WERE LEGACY POSITIONS. THAT THEY WERE ON THE BOOKS WHEN HE ARRIVED. IS THAT THE WAY YOU SEE IT?

LEWIS: YEAH, I DO. I DON'T KNOW EXACTLY WHAT HAPPENED FROM THE TIME JOHN CAME TO THE TIME THAT THESE THINGS HAPPENED. BUT I DO THINK THERE WERE IN THE MAIN, A LOT OF EMBEDDED POSITIONS. AND WE HAD A CREDIT MELTDOWN OF EPIC PROPORTIONS. AND YOU SAW THE RESULTS.

BARTIROMO: BUT YOU WERE SEEING THE LOSSES. YOU WERE GETTING THE SAME P & L STATEMENTS EVERY DAY THAT EVERYBODY ELSE WAS. YOU KNEW THAT THE COMPANY WAS BLEEDING THIS RED INK.

LEWIS: YEAH, WE KNEW THEY WERE, BUT THE LOSSES BECAME EXACERBATED TOWARD THE END OF THE MONTH OR THE MIDDLE TO THE END OF THE MONTH.

BARTIROMO: AND, OF COURSE, LET ME ASK YOU WHAT I ASKED JOHN THAIN WHEN HE CAME ON THE SHOW, AND THAT IS HOW DO YOU JUSTIFY PAYING OUT $4 BILLION IN BONUSES, AND MOVING IT FORWARD TO THE END OF THE YEAR, WHEN YOU ARE LOSING THIS KIND OF MONEY? YOU WERE AWARE THE BONUSES WERE BEING PAID, CORRECT?

LEWIS: WE WERE AWARE THAT BONUSES WERE BEING CONSIDERED. AND THAT HE HAD SOME RANGE. I PERSONALLY WAS NOT INVOLVED BUT THERE IS LITIGATION AROUND THAT, AND I NEED TO BE CAREFUL ABOUT THAT. PARTICULARLY SINCE I WASN'T ON THE POINT IN THAT PARTICULAR INSTANCE. BUT I CAN TELL YOU THAT WE PAY OUR BONUSES TO THE EXTENT THAT WE- PAY BONUSES, IN FEBRUARY, SO THAT WE CAN SEE THE FULL YEAR RESULTS. BUT, AS YOU KNOW I, AND ALL OF MY DIRECT REPORTS WILL RECEIVE NO BONUSES AT OUR REQUEST.

BARTIROMO: WHAT ARE YOU DOING TO HALT THE STREAM OF PEOPLE LEAVING THE FIRM? I MEAN, YOU'VE GOT BOB MCCANNLY (PH)YOU'VE GOT SOME SENIOR PEOPLE, GREG FLEMING (PH), HAVING LEFT THE FIRM. A LOT OF PEOPLE SAY THAT THE EMPLOYEE SITUATION IS HEMORRHAGING. HOW ARE YOU GOING TO KEEP PEOPLE IN THEIR JOBS, KEEP TALENTED PEOPLE AT THE FIRM, AND ASSURE THE FINANCIAL ADVISORS THAT YOU SUPPORT THEM?

LEWIS: WELL, I THINK THE FINANCIAL ADVISORS KNOW THAT I SUPPORT THEM, BECAUSE I'VE BEEN IN CONTACT WITH THEM THROUGH TOWN HALLS, ETCETERA. WE HAVE A PERSON DAN SONTAG (PH) WHO IS AN OUTSTANDING LEADER. WHO PREVIOUSLY WAS A FINANCIAL ADVISOR AND HAD MOVED UP THROUGH THE CHAIN. SO WE HAVE GREAT LEADERSHIP IN PLACE. AND HE HAS A WONDERFUL FOLLOWING WITH THE FINANCIAL ADVISORS. BRIAN MOYNAHAN (PH HAS TAKEN OVER FROM THE GREG FLEMING. HE'S DOING A GREAT JOB. HE HAS THE RESPECT OF BOTH THE MIDDLE PEOPLE AND OUR PEOPLE AS THEY'VE GOTTEN TO KNOW HIM. AND SO YOU DON'T WANT TO LOSE PEOPLE. I DON'T WANT TO SUGGEST THAT YOU DO. BUT YOU'D RATHER IT HAPPEN EARLY SO YOU CAN GO AHEAD AND GET ON WITH THINGS, AND KNOW WHO'S GOING TO BE WITH YOU, AND WHO'S NOT. AND THIS IS NOT THAT UNUSUAL THAN CERTAIN OTHER ACQUISITIONS.

BARTIROMO: BUT, CERTAINLY, THIS IS A HIGHLY UNUSUAL MOMENT FOR YOUR COMPANY, FOR THE ENTIRE INDUSTRY. AND YOU ARE FACING A CRISIS OF CONFIDENCE OUT THERE. HOW ARE YOU GOING TO ASSURE INVESTORS THAT YOU HAVE A FORMIDABLE PLAN TO GET THE COMPANY OUT OF THIS?

LEWIS: NOBODY EXECUTES BETTER THAN WE DO. AND THIS IS NOT OUR FIRST ACQUISITION. AND SO THIS PLAYS TO OUR STRENGTH. WE'RE GOING TO PUT OUR HEADS DOWN, WE'RE GOING TO SUPPORT OUR ASSOCIATES. AND THEY'RE GOING TO SUPPORT OUR CLIENTS. AND WE'RE GOING TO GET ON WITH DOING BUSINESS. AND, FRANKLY WE'VE HAD SOME - WE HAD A PRETTY GOOD JANUARY IN TERMS OF CUSTOMER FLOWS, IN TERMS OF, PARTICULARLY, REFINANCINGS. THE INVESTMENT BANK HAS GOT SOME GREAT BACK LOGS. TRADING HAS BEEN BETTER. AND SO PARTICULARLY AT MERRILL, AND COUNTRY WIDE, WE HAVE SOME NICE SLOWS IN JANUARY.

BARTIROMO: ARE YOU GOING TO SUPPORT THE MORTGAGE CRAM DOWN?

LEWIS: WE WOULD - HAVEN'T SEEN THE FINAL VERSION, BUT WE'RE ALWAYS CONCERNED WHEN YOU HAVE THE ABILITY, PARTICULARLY WITH THAT FIRST MORTGAGE PRODUCT, TO CHANGE THE CONTRACTUAL TERMS, AND ALLOW BANKRUPTCY JUDGES TO DO IT. PARTICULARLY IF-- IF THE CUSTOMER DOESN'T HAVE TO AT LEAST COME TO THE LENDER FIRST TO SEE IF SOME MODIFICATION CAN BE MADE.

BARTIROMO: THIS COULD REALLY SPILL ONTO A WHOLE NUMBER OF LOANS. AUTO LOANS, CREDIT CARDS, THIS COULD REALLY HAVE A SERIOUS IMPACT ON, CERTAINLY, YOUR BALANCE SHEET, AND THE ENTIRE INDUSTRY, CORRECT?

LEWIS: YEAH. YEAH. AND I'M AN OPTIMIST. SO I THINK, AS WE STEP BACK AND LOOK AT SOME OF THESE THINGS, AND LOOK AT THE UNINTENDED CONSEQUENCES, AND HOW FAR THIS COULD GO I THINK THIS THERE COULD BE SOME CHANGES MADE THAT WE CAN MAKE THIS WORK.

BARTIROMO: YOU SAID THAT YOU SAW SOME IMPROVEMENT IN JANUARY. TELL US ABOUT THAT.

LEWIS: WELL, WE'RE SEEING GOOD FLOWS WITH DEBT ORIGINATIONS. PARTICULARLY HIGH GRADE, WE'VE ACTUALLY DONE A HIGH YIELD DEAL OR TWO. WE'RE SEEING A RE-FI BOOM. AND SO COUNTRY WIDE IS JUST ON FIRE IN A POSITIVE SENSE BECAUSE OF THAT. AND THAT'S REALLY GOOD FOR THE COUNTRY. BECAUSE ABOUT 20 PERCENT OF THOSE RE-FIs OR FIRST MORTGAGE - I MEAN, EXCUSE ME, PURCHASED MORTGAGE PRODUCT. BUT YOU'RE ALSO FREEING UP A LOT OF CASH FLOW FOR THE CONSUMER. SO THAT MAKES THE POINT THAT LOWER MORTGAGE RATES IN THE 4 1/2 PERCENT OR SO RANGE IS REALLY IMPORTANT TO GET THIS HOUSING MARKET BACK IN PLACE.

BARTIROMO:SO WHEN WOULD YOU EXPECT A STABILITY TO EARNINGS? WHEN WOULD YOU EXPECT TO REPORT A POSITIVE EARNINGS NUMBER?

LEWIS: WELL, LET'S STEP BACK. WE MADE MONEY IN 2007. WE MADE MONEY 2008. WE DIDN'T LOSE TENS OF BILLIONS OF DOLLARS LIKE SOME OF THE OTHER BANKS IN THE IN THE WORLD HAVE DONE.

BARTIROMO: WELL, YOU OWN MERRILL LYNCH, AND MERRILL LOST $15 BILLION IN A THREE MONTH PERIOD.

LEWIS: WELL, WE'LL SEE WHAT THEY - BUT WE DIDN'T OWN THEM THEN. WE OWN THEM NOW. BUT BANK OF AMERICA HAS BEEN PROFITABLE IN BOTH THOSE YEARS. VERY LIQUID. WELL CAPITALIZED. AND THEN NOW WE'LL SEE WHAT HAPPENS WITH MERRILL LYNCH, GOING FORWARD. BUT ALL I CAN TELL YOU IS THAT, IN JANUARY, THE CAPITAL MARKETS WERE BETTER. AND THAT WE DIDN'T SEE THE DETERIORATION IN THE ASSET VALUES THAT WE SAW IN THE FOURTH QUARTER OF LAST YEAR.

BARTIROMO: WELL, THERE'S BEEN SUCH A HE SAID/SHE SAID WITH REGARD TO JOHN THANE LEAVING BANK OF AMERICA. WHY DID YOU FIRE JOHN THANE?

LEWIS: I ALMOST FEEL LIKE THAT'S ANCIENT HISTORY, AND I'M NOT GOING TO REVISIT THAT. BUT I WILL TELL YOU, I WISH - I'M SORRY IT HAPPENED. IT'S NEVER PLEASANT TO HAVE A SITUATION LIKE THAT. AND I WISH JOHN THE VERY BEST.

BARTIROMO: DID YOU GET A CHANCE TO DO ALL THE DUE DILIGENCE YOU NEEDED TO DO IN THAT WEEKEND, 48 HOUR PERIOD, BEFORE YOU ACTUALLY AGREED TO ACQUIRE MERRILL?

LEWIS: LET ME TELL YOU WHAT WE DID RIGHT AND THEN, KIND OF, THE MISTAKE. FIRST OF ALL, WE SAW EVERYTHING WE NEEDED TO SEE, AND WE MADE JUDGMENT ON THE MARKS. NOW, WITH HUNDREDS OF PEOPLE LOOKING AT IT, OVER THE LAST MONTH OR SO, OR TWO OR THREE MONTHS, WE HAVEN'T FOUND SOMETHING THAT WE DIDN'T SEE AND THEN, AND YOU REMEMBER, WE HAD CHRIS FLOWERS (PH) AND HIS GROUP, KIND OF, SIDE BY SIDE, YOU KNOW, DOING THE SAME THING. SO WE HAD TWO SETS OF GROUPS OF EYES ON IT. THE MISTAKE WAS WE DID NOT ACCURATELY REFLECT THE MELTDOWN THAT OCCURRED IN THE FOURTH QUARTER. NOW, I'M NOT SURE MANY, IF ANY, PEOPLE DID, BUT IT WASN'T A MATTER OF DUE DILIGENCE MISSING SOMETHING. IT WAS THAT WE MADE AN ERROR IN TERMS OF JUDGING HOW BAD THAT MELTDOWN WOULD BE.

BARTIROMO: SO YOU DON'T HAVE ANY REGRETS IN TERMS OF ACQUIRING MERRILL LYNCH?

LEWIS: NO. NOT OVER LONG TERM. I MEAN, IT'S BEEN PAINFUL. AND OBVIOUSLY, WE DIDN'T EXPECT THE SIZE OF THE LOSS BECAUSE OF THAT MELTDOWN. BUT I'M STILL AS CONVINCED AS EVER THAT, STRATEGICALLY, THIS MAKES SENSE. AND THAT, AS SOON AS WE CAN GET THIS TARP MONEY OUT, THROUGH EARNINGS THAT THE SHAREHOLDER WILL BE GLAD WE DID THE DEAL.

BARTIROMO: ARE YOU GOING TO NEED MORE MONEY FROM THE GOVERNMENT?

LEWIS: NO. NO.

BARTIROMO: CATEGORICALLY YOU CAN SAY NO.

LEWIS: RIGHT. CATEGORICALLY I CAN SAY NO.

BARTIROMO: WHAT WOULD YOU LIKE TO SEE OUT OF PRESIDENT OBAMA'S STIMULUS PLAN TO ACTUALLY GET THE COUNTRY OUT OF THIS?

LEWIS: I'M NOT AN ECONOMIST, SO I DON'T KNOW ALL OF THE THINGS THAT HAVE IMMEDIATE EFFECT. BUT HOW MUCH EVER THEY HAVE IN THERE FOR IMMEDIATE EFFECT, PUT SOME MORE IN. BECAUSE THIS - YOU SAW TODAY, WITH 7.6 PERCENT UNEMPLOYMENT THE ECONOMY'S NOT GETTING BETTER. AND I WOULD EXPECT THE FIRST QUARTER TO BE WORSE THAN THE FOURTH. AND POSSIBLY THE SECOND AS BAD. AND NO IMPROVEMENT, ACTUALLY, OCCURRING UNTIL, YOU KNOW, THE THIRD OR FOURTH QUARTER. AND SO WE NEED SOME IMMEDIATE EFFECT FAST.

BARTIROMO: SO YOU THINK WE'RE GOING TO SEE FURTHER JOB CUTS IN 2009.

LEWIS: OH YEAH. I MEAN, I THINK WE'LL SEE UNEMPLOYMENT RATES GO UP. AND WE'RE SEEING EIGHT TO 8 1/2 PERCENT. BUT YOU'VE PROBABLY SEEN ESTIMATES OF NINE PERCENT AND TEN PERCENT. WE DON'T THINK IT'S GOING TO GET THAT BAD. BUT WE DON'T TOTALLY THINK IT'S OUT OF THE QUESTION.

BARTIROMO: HOW DEEP HAS THE CRISIS OF CONFIDENCE BEEN? I MEAN, A LOT OF PEOPLE SAY, "LOOK, THIS IS HAPPENING ON MANY LEVELS. EVEN DEPOSITORS ARE FEELING IT." ARE YOU SEEING IT IN ANY OTHER PARTS OF YOUR BUSINESS IN TERMS OF THE CRISIS OF CONFIDENCE?

LEWIS: YOU KNOW, WE HAD A PERIOD, IN THE FALL, WHERE WE HAD FLOWS INTO THE COMPANY THAT WERE - SLOWS THAT WE'D NEVER SEEN BEFORE. THAT WAS BECAUSE OF SOME OF THE DISRUPTIONS FROM SOME OF THE OTHER BANKS. NOW THE DEPOSITS FOR JANUARY, WE'RE ABOUT ON PLAN. SO IT'S KIND OF GOTTEN BACK TO NORMAL.

BARTIROMO: AND WHAT DO YOU SEE AS THE MOST IMPORTANT CHANGE YOU COULD MAKE IN THE NEXT TWO YEARS TO RESIZE YOUR BUSINESS TO THE ECONOMIC REALITIES THAT YOU FACE?

LEWIS: WE'RE DOING THAT AS WE SPEAK. I MEAN, WE SAW THAT THINGS NEEDED TO BE DONE TO DOWNSIZE (NOISE) IN CERTAIN AREAS. WE'RE DOING IT. BUT, MARIA, IRONICALLY WE'VE ALSO HIRED 3,000 PEOPLE AT OUR MORTGAGE GROUP.

BARTIROMO: WE'RE GOING TO SEND IT OVER TO PRESIDENT OBAMA RIGHT NOW. I'M GOING TO CONTINUE TALKING TO KEN LEWIS. AND THE REST OF THE INTERVIEW WILL BE ON CLOSING BELL.





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