dudley cornish taught at a state teacher's college in kansas. and because of the lack of travel funds when he wrote the book, "the sable arm" was researched and written before sputnik even. his main reliance, cornish's main reliance. trips to the kansas state historical society. he visited the national archives enough to consult some colored troops bureau material in the general's records, but that was about it. i discovered a couple of years later when i was in the middle of the manuscript the answer to my question why. at that point, i was writing about the raising of black regiments in the north and had come to th presentation of reg mental colors to the 20th u.s. colored infantry in new york city and that regiment taking ship for new york city. cornish uses this incident and a long quote from "the new york times" that appeared the next day in "the times." only eight months after the new york draft riots, "the times" wrote, a regiment of black soldiers fully armed was headed for the theater of war. it is only by such occasions that we can at

dudley is the president of the federal reserve bank of new york. in a recent speech in my home state of new jersey, he talked about those borrowers who were underwater. and he said in part without a significant turn-around it in home prices and employment, a substantial portion of those loans deeply underwater will ultimately default absent an earned principal reduction program. do you agree with his analysis? >> no. i want to be clear. the federal reserve doesn't have an official position to principal reduction, and i think it's a complicated issue. it depends on what your objectives are. in terms of avoiding delinquency, there's a reasonable debate in the literature about before reducing principal or payments is more important. so that's one issue. in terms of issues like mobility, for example, able to sell your home and move elsewhere, there are also alternatives to principal reductions included deed in lieu and short sales. there's circumstances where principal reduction would be constructive and would be cost-effective in terms of reducing def

dudley in ms. spee his speech? couldn't this shared appreciation approach discourage homeowners from defaulting when they could otherwise pay their mortgage? >> we thought that was to congressional prerogative to make those determinations. we tried to provide a balanced nalgsz of principal reduction. i think it's a complex subject. it's not that we disagree in the goals. we want to reduce foreclosures and delinquencies, and we want people who want to move to be able to do that. there are often a number of alternatives in different situation. if the idea is to just move, than a short sale or deed in lieu might be the effective way to do it. if the goal is to reduce payments then refinancing might be the most effective way to do it in terms of the dollars spent. i think there's interesting questions from the perspective of public policy about what the best way to proceed is, whether that's the most cost-effective approach or not.

still ahead the death toll rises in the dudley west virginia blaze. trayvon martin's mother speaks out today as more demonstrations are planned. the queen of england >> as people are preparing for more protests in the trayvon martin kansas, churchgoers across the country took place. >> thousands across the country wearing hoodies at public rallies. inside churches, as a symbol of protest to demand justice in the case of trayvon martin. the teenager was shot to death last month by a neighborhood watch capt.. >> we appreciate all the support. it means a lot to us. >> his mother reacted to the nationwide protest against george zimmerman. he claims he killed the 17-year- old in self-defense. >> after this started he could not stop crying. >> zimmerman has never been arrested or charged in the killing. >> because he is not in jail he is confident that this would blow over. >> but it will not. the just departments -- in your view -- >> his legal adviser his content will remain free. >> after the 911 tapes are released, it will show clearly that george zimme

but the core of the fed, bernanke and bill dudley, they basically have a sense that the fed needs to continue to be supportive, and that inflation can rise above two percent which it has in recent months and still permit a very easing federal reserve over the next several years. we have a repressive financial environment that promotes low interest rates at the expense of savers, and i think we need to get use to that for a long time. >> susie: thank u so much, bill. appreciate you coming on the program. >> thank you, susie. >> susie: have a great weekend. we've been speaking with william gross, founder and chief investment officer of pimco. still ahead, i'm eric ca miller at a store. i'll tell you why retailers are likely to see more green than usual this st. patrick's day. >> susie: long lines and lots of hype. a new apple product has gone on sale from tokyo to london to new york. the faithful lined up to buy the new ipad. how big of adeal is it? as darren gersh reports, the ipad is a big business indeed. >> reporter: just look at all these people standing in line. they've made the

chairman, new york fed president william dudley gave a speech which he argued that it would "make sense for fannie and freddie to routine reduce principal on delinquent mortgages, using taxpayer dollars." these statements suggest to many that the fed do in fact have a blue print there for housing market policy. that blueprint appears to involve using the taxpayer supported gses as a piggy bank. in weighing in, certain fed governors have begun to take sides in which should be a congressional policy debate, i believe. the fed has been and should, i believe, continue to be a useful resource for information and analysis on the housing market. i believe it should not become an active participant in the legislative debate over the future of housing finance. i hope that the fed's recent foray will not become common practice. mr. chairman, when you say you believe the fed is most effective when it's nonpartisan, transparent and accountable, i believe that's right. i'm interested in hearing from you today, mr. chairman, on how you intend to continue to improve the fed's performance on all three

dudley said. if you're not supporting principal reduction and you're not talking about how hope owners can get out from under this foreclosure market, what do you suspect we do to improve the housing market? >> we discuss a whole variety of things in our white paper. again, with the proviso there was our goal was to provide background analysis to help congress make good decisions. for example, we have a big overhang of homes in the market. one of the ideas that we've discussed is the moving reo to rental. that is something that the fha has begun a pilot program on that's interesting. we talked about -- tried to identify some of the barriers to doing that on a large scale. that's one potential direction. there's a lot of issues right now with the tightness of mortgage standards where people can't get mortgage credit even bh they meet gse standards. so we have talked about clarifying the warranties as well. i think that could be a constructive step. servicing is an important issue. you know, you jus

william dudley at the fed who gave the primary dealers status j.c. flowers who hasn't been mentioned very much but he placed from what i understand for a brick or design in the role of leading m.f. global because he had an investment in m.f. global and it wasn't doing well and he thought this was a way to maybe try to energize his investment it's curious that had only just as been brought out anywhere that actually just records and remains a managing partner of j.c. flowers' company and he remains on the one that boards of his they and yet no one stopped about the conflict of interest possible dealings between those two companies etc so you find goldman everywhere and yet of course gary gensler. gary gensler had assured casey i mean how how is someone a former crony you can see who contributed to mr reelection campaign in new jersey and he's supposed to be in charge of regulating it you know a lot of the spin masters from the other side were leaking stories and the rest of the mainstream press are going to get by you guys who are on top of it that th

just today bill dudley, he does not yet feel the economy is on a sustainable path to recovery.eds more liquidity from the federal reserve. where as the great inflakes hawk, richard fisher, of the dallas fed, says enough liquidity. let the economy stand on its own. >> you will always have differences of opinion at the central bank. it is very difficult to have unanimous view. but the truth of the matter is there are two mandates, inflation and employment. employmenting with depending on what you pick is above the unemployment rate. until the mandate is satisfied, there are a lot of voices in the central bank arguing there may be more done. >> when do you expect the feds to move on rates? already receiving the market, do it its job. yields on ten yields now. money moving out of bonds, moving into stocks. pushing yields higher. when would you expect to move interest rates higher? >> if you tell me when the unemployment rate will go down to 6, 6 1/2%, i will tell you when the federal reserve will raise rates. >> you think that's what it is, 6 1/2%. >> well if you don't tell me, i w

i mean, you've got janet yellin in there, bull dudley, the new york fed. they're pretty outspoken dovz. where do you think ben bernanke comes out in this fed debate? is he a hawk? is he a moderate? is he a dove? how do you read mr. bernanke? >> i would -- i would call him a realist, larry. i don't think he falls on either side of it. i think he pays very careful attention to the markets and what the markets are telling him and responds accordingly. >> all right. >> i think he has been very much in favor. his principle goal, i think, is transparency. >> all right. we're going to leave it there. mark olson, former member of the federal reserve board. appreciate it very much. thanks for helping us. we've got another stress to talk about. next up, a political stress test. question, will mitt romney show the south he is the most electable republican on the ballot? folks, don't forget, free market capitalism still the best path to prosperity. the kudlow report will be right back. in america, we believe in a future that is better than today. since 1894, ameripris

today we saw yield rise as fed dudley was not his usual self.he risks to the macro economy are tilted to the downside. especially with this housing data. he wasn't as dovish as normal, we still think any meaningful rise in yields is going to be met with money on the sidelines that remains yield-starved. >> i was just going to say, it doesn't seem like the individual investor, anyway, who have been socking money away in the bond market are convinced that equities are a better bet at this point. even though we've seen the move in yields. >> that's right. and there has been an asset allocation trade which has very much been responsible for the rise in yields over the last three to four weeks. and i think specifically the retail investors still are a little nervous about perhaps going all-in in the equity market. as the equity market continues to grind higher, there will be that allocation shift out of bonds into stocks. and you'll have equity managers who may be force today chase performance in equities. and asset allocation trade does have the pot

among them bill dudley testifies before a house committee at 10:00 a.m.s all the aid the fed provided to help mitt indicate the eu debt crisis. ben bernanke gives another lecture to students at ghornlg washington university. and james bullard continues his tour of asia. let's get a couple final thoughts. chip, we've had a really impressive run here for equities and i have to ask taking the other side of the coin, are we due for a correction, shallow or otherwise? >> i don't look at a catalyst that will push us down significantly. i think it's more of a breather. but i would take advantage of that situation, look for those opportunities to really try to deploy more cash. but i would leak moreards q3 versus right now. >> ian, you also get in the short term despite your long term bullish call. and chip talked will about catalyst. >> three main catalysts. economists have started to revise up their numbers so much that beating expectations. so we don't do that then we'll drop back again because accep sentiment is close to record highs. and finally, risk positi

chairman, new york fed president william dudley gave a speech in this which he argued that it would quoteie and freddie to, quote, routinely reduce principal on delinquent mortgages using taxpayer dollars. these statements would suggest to many that the fed does not, in fact, that the fed did, in fact, have a blueprint there for housing market policy. that blueprint appears to involve using the taxpayer-supported gses as a piggybank. in weighing in on housing policy, certain fed governors have begun to take sides in which should be a congressional policy debate, i believe. the fed's independence for monetary policy has always been premised on its remaining nonpartisan and not advocating for specific legislative measures. the fed has been and should, i believe, continue to be a useful resource for information and analysis on the housing market. i believe it should not become an active participant in the legislative debate over the future of housing finance. i hope that the fed's recent foray into the housing policy will not become common practice. mr. chairman, i believe went you say that

dudley is the president of the federal reserve bank in new york.ech, i talked about those borrowers under water. he said, in part, without a significant turnaround in home prices or employment, a significant portion of those mortgages underwater will default. do you agree with his analysis? >> i want to be clear -- the federal reserve does not have a position on principal reduction. it depends on your objectives. in terms of avoiding delinquency, there is a reasonable debate in the literature on reducing payments. that is one issue. in terms of issues like mobility, for example, the ability to sell your home and move elsewhere -- there are alternatives, including a short sale. it is a complicated issue. there are circumstances where principal reduction would be constructive and cost-effective in terms of reducing default risks and improving the economy, but i do not think there is a blanket statement you can make on that. >> right now, freddie mae and fannie mac home our guarantee 60% of the mortgage market in the country. do you think there regula

has hasn't thought about him having that little -- >> well, he could actually, you know, be shot by dudleyd departed and it -- deported and it would be gay with them. >> no, my name is heavy chevy rivers. >> geraldo rivera's head as empty as al capone's vault. >>> rush limb bra on the supreme court. >> he crushed them. >> i want to remind you of something. >> you do, actually. >> this healthcare law debate at the supreme court and everywhere else is about much more than just health care. it's about the constitution. people ask me all the time, the constitution is what it is rush. how can you have four justices on the supreme court who simply refuse to accept it? and the answer, well frustrating, it's very simple. they don't like it and they want to change it. >> besides three of them are sluts! look at them. absolutes on the supreme court! how do they even understand what -- >> so the commerce clause and the -- and equal protection general welfare, blah, blah, blah. blah. >> blah, blah, blah. >> yeah. >> steve doocy and andrew that poll tanthatpoll tannapolitano. >> can they compel you to

. >> today bill dudley is speaking, we'll hear from dallas fed derek fisher.bernanke isn't trying to do is to get ahead of what a lot of investors see is this pullback coming. what we've seen is after the latest round of stimulus, that's when the economy starts to weaken and the fed has to come back in and try to get everything going again. maybe this time they're saying why wait. it's like the snickers approach. >> i think bernanke realizes that $4 oil is upon us, we're so close. $4 has been a red flag -- >> i'd love $4 oil. >> $4 oil. >> $4 oil? >> $4 per gallon of kbgas. >> i knew what he meant. >> it's been a red flag for the economy and the market. we need to be cognizant of that. >> yesterday we had guys raising the bar on that. one of the guys who is the convenience store spokesperson. he said now $5 is the tipping point. >> it's true the u.s. can handle higher levels of gas prices in the pass but it's still a problem. you don't really see what it does to the distribution of how people are doing within a country. it falls disproportionately on low incom

dudley? does this help avoid some of the problems?ared predicament this shared appreciation -- couldn't this shared appreciation be a difference? >> first of all, we were careful not to make explicit recommendation because we felt that was a congressional prerogatives to make those determinations. we tried to provide a balanced analysis of principal reduction. it is not that we disagree in the goals. we want to reduce foreclosures and delinquencies. we want to help people want to move to be able to do that. but there are often a number of alternatives. for example, if the ideas just to be able to move, then a short sale may be the most effective way to do it. if the goal is to reduce payments, the refinancing of lower interest rate or modification would be the best way. there are some interesting questions from the perspective of public policy on what the best way to proceed is, whether it is the most cost-effective approach or not. >> you have interested many of us in principle reduction. principal reduction modifications for underwa

dudley, who's the president of the federal reserve bank of new york, in a recent speech in my home state of new jersey tacked about those borrowers who are -- talked about those borrowers who are underwater. he said without a significant turnaround in home price probationes and employment, a portion of those loans will ultimately default, absent an earned principal reduction program. do you agree with his analysis? >> i want to be clear. the federal reserve doesn't have an official position on principal reduction and i think it's a complicated issue. it depends on what your objectives are. in terms of avoiding delinquency, i think there's a reasonable debate in the literature about whether reducing principal or reducing payments is more important. so that's one issue. in terms of issues like mobility, for example, ability to sell your home and move elsewhere, there are also alternatives of principal reduction including things like deed in lieu and short sales. it's complicated. there there are circumstances where it would be constructive and cost effective in temples reducing default ris

dudley, the president of the federal reserve bank of new york, in a recent speech in new jersey talked-about borrowers who are under water. he said without a some event turnaround in home prices, a substantial portion of those loans will ultimately default. do you agree with his analysis? >> the federal reserve does not have a position comparable reduction, and it is a complicated issue. in terms of avoiding delinquency, a reasonable debate in the literature about whether reducing principal or reducing payments is more importance. that is one issue. in terms of issues like mobility to sell your home and move elsewhere, there are alternatives of principal reduction included short sales. there are circumstances where principal reduction would be constructive and would reduce -- and be cost effective in terms of reducing default risk and improving the economy, but i do not think there is a blanket statement you can make. >> right now fannie and freddie mac are currently owning or guaranteeing more than 60% of the mortgage market. do you think there regulator at the fha has been aggressive enoug