mr. dudley that a targeted principal reduction program could be designed in way that would net present positive for tax, investors, and homeowners? >> well, first, president dudley was speaking for himself. as i said -- >>> i understand. >> -- the board doesn't have an official position on that. where i do agree with him is to say that the devil's in the details. i mean, a lot would depend on what the criteria are for being eligible for principal reduction and how it would be structured. for example, some think a useful approach would be to give principal reduction but to have an equity-sharing arrangement whereby if there are future gains, those would flow back to the lender. so i think it depends very much on the way the principal reduction is structured. no doubt there are some situation where is that would be the most effective method of averting unnecessary foreclosures. but i do think we should look not only at that, we should look at the whole range of tools for averting unnecessary foreclosures, and we should look at other issues like the conversion of foreclosed homes to rentals, steps

mr. dudley who is the chairman of the federal reserve bank of new york and other people over the last two weeks who understand what's coming out, thinking very actively about minimize the damage, get a big deal even with this congress after the lame duck. i'm still, for this one time am going to think about a happy outcome. >> we'll come back to it. yea. >> i would take two questions before we go to the panel. >> you talked about sequestering. congressman adam smith, ranking member of the house arms services committee has a couple of panels and he's made the point that by jawboning this whole thing, don't worry. we don't have to worry about the initial intent senator graham and others, i don't need to worry about it. he says the other point and the biggest supporter of the military as he is fort lewis and his district, they're not interested about worry budget defense budget. they're worried about whoopths to the -- their retire am incomes and they're worried about medical care and when the senator was talking, the issues he brought up about the guard and everything else. the chief of sta

mr. dudley that it targeted principal reduction program could be designed in a way that would be net-present value positive? >> president dudley was speaking for himself. he does not have official position on that. to have an equity-sharing arrangement whereby there future gains, those would go back to the lender. it depends very much on the way the principal reduction is structured. no doubt, there are some situations where that could be the most effective method of averting a necessary foreclosures. we should look at that and a whole range of tools for averting foreclosures and look at other issues, like the conversion of homes to really address the housing issues in the market. >> thank you. >> i want to talk about a different topic, his somewhat esoteric topic that may never be of much interest to a lot of folks, but it is to me. no one to talk about the derivatives market, in particular the interest-rate swap. if i got my numbers correctly, the notion of size, the size of this market has grown $682 billion since 1987 to over $400 trillion today. that allies and underlying market growth

mr. dudley that a targeted prince will reduction program could be designed in a way that would net presentvalue and investors? >> first, president dudley and it doesn't have an official position on that. for i do agree with him is he the devil is in the details. a lot would depend on what the criteria are for being eligible for principled reduction in how it would for example, some think a useful approach would be to give principal reduction, but to have been adequately sharing arrangement whereby if their future games goes with flow back to the lender. ..

mr. dudley that if targeted principal reduction program could be designed in a way that would net present positive taxpayers, investors and homeowners? >> well, first, president dudley was speaking for himself. the board doesn't have an official position on that. where i do agree is the did he have sill in the details. a lot would depend on what the criteria are for being eligible for principal reduction and how it would be structured. for example, some think it would be principal reduction but to have equity sharing arrangement where by if there are future gains those would flow back to the lender. so i think it depends very much on the way that the principal reduction is structured. no doubt there are some situations where that would not most effective method of ave averting unnecessary foreclosures but i think we should look not only at that but the whole range of tools and we should look at other issues like the conversion of foreclosed homes to rentals, steps to improve access to credit of mortgage borrowers and so onto really address the whole range of issues in the housing market.

mr. dudley was saying. if you've got to give them some kind of training.some folks think that a folk can just walk into a job and automatically do the job. i think what employers want, we often talk about what employers want. correct me if i'm wrong. i think what employers want is a come to work, do the job, do it well. and if they can have a trained employee from the beginning i assume it would save them money and that's the reason why they want trained employees, ray? >> absolutely. because employers a fortune because they want the right fit for the job. >> said the other thing i guess the flipside of that is when they have to train, they can find programs to train these folks before they get there, meaning they don't have to spend resources training people, is that ray? >> another thing interesting to look at folks that i see everyday, while they may trade in these areas, they are giving skills that hopefully are transferable. in other words, they may not have a chat today with a may get a job in the job may not last so long. but at the same time they g

mr. dudley, who is the chairman of the federal reserve bank of new york and other people over the last two weeks who understand what's coming and are thinking very actively about minimize the damage, get a big deal. even with this congress. after the lame duck. so i'm a doer, scott, but still for this one time i'm going to think about a happy outcome. >> we'll come back to it. i will take two questions before we go to the panel, so both these gentlemen. >> steve, i don't talked about se questering. congressman adam smith, he's made the point that by jaw boning this whole thing, don't worry. we don't have to worry about the initial intent, and senator graham, i don't need to worry about it. he said his biggest supporter of the military as he is, fort lewis and his district. he goes back to his district, they are not interested about worrying about the defense budget. they are worried about what's happening to their retirement incomes and what's happening to their medical coverage. when the senator was talking, the issue she brought up about the guard, the chief of staff, the air force, the

mr. dudley, chairman of the federal reserve bank of new york and other people over the last few weeks tonderstand what coming out and are thinking very actively about an amazing, get a good deal, even with this congress after the lame duck. so i'm a doer, but this one time i'm going to think of a happy outcome. >> will come back to it. i will take two questions before we go to the panel. >> you talked about sequestering. congressman added smith, ranking member of the house armed services committee has made the point that by jawboning this holds thing, don't worry, we don't have to worry about the initial intent of senator graham and others. .. how do you convince the american people how serious this is? >> hello, i'm from the observatory group this is from steve bell. let's suppose for the sake of argument that an agreement is not possible in the lame-duck session on the sequestration to avoid the automatic cuts? to what extent does the a administration have discretion in terms of the timing of how serious it implements the amount of cuts because i've read that they may have some discret

dudley says very little planning went into the u.s. open stunt. he just snuck under a rope or two. >> i wish to apologize to mr.t a twit pik with a caption my new friend. >> come again? what bird is he calling. >> according to the heads of new york city's audubon

mr. deadly that it targeted principle reduction program could be designed in a way that would net present value positive taxpayers investors and homeowners? >> well, first president dudley was speaking for himself and does not have an official position on that. where i do it remove him is to say that the devil is in the details. a lot would depend on what the criteria are to be eligible for principle reduction and how it would be structured. for example, some think a useful approach with each to give principle reduction but to have an equity sharing arrangement whereby there are future gains, does it go back to the lender. i think it depends very much on the way that the principle reduction is structured. no doubt there are some situations where that would be the most effective method of offering unnecessary foreclosures but i do think we should look not only at that, we should look at the whole range of tools for averting unnecessary for hoosiers and look at other issues like the version of foreclosed homes to rentals, steps to improve the credit of mortgage borrowers and so on, to really address the whole range of issues in the housing market. >> thank you very much m