wherever you look. the dow posting its best day in more than 2 1/2 years with a rocking 490-point gain. that puts the dow back in positive territory for the year. above 12,000, which is a psychologically very important level for the 401(k)'s in this country. the s&p and nasdaq up more than 4% as well. why? well, it began with america's top economic man ben bernanke, bailing out europe which is on the verge of bringing down the economy. former new york stock exchange floor trader, obviously, it was ben bernanke working with other central bank chiefs around the world. this is europe-related? >> this is definitely europe-related. there's more to today's move than just that but the driver was clearly futures were roaring very, very early, as a direct result of ben bernanke, the federal reserve's move to effectively lower the cost of gaining access to u.s. dollars. why? because u.s. dollars, that's the world's reserve currency. that's what the euro zone needs for their banks and financial institutions to provide a liquidity to tighten sovereign debt spreads. >> i remember in 2008, everybody was saying this was a crucial moment. we look at europe, the whole world put in a position where we were when lehman brothers collapsed. we remember what a terrible fall that was. >> right. >> one thing i remember about that was we had up days of 600 points and down days of 600 points. i'm wondering how much you can read into today. >> this is definitely a period of historic uncertainty. there's no question that this volatility drives confidence out of the market, drives participants out of the market and it's generally not good for market psychology. but an up day is clearly better than a down day and today was a 2 1/2 year high in terms of swing to the upside. so it's quite positive. the question is, can we build on it? >> what do you think? what's your bottom line? you've been pretty optimistic, peter. >> i have been optimistic. i do think we can build on it for several reasons. the shopping season is off to a great start. employment has largely stabilized. in fact we got data today that speaks to the fact not only that, it's modestly improving. firings are down, adp report, 50% better than expected. friday's labor department numbers should be better than expected based on the adp numbers we saw this morning. the tone is improving. >> yes. >> and if it continues to improve, can we move higher? yes. >> peter kenny, thank you very much, appreciate it. >> peter, of course, referring is challenger an adp, different measures of jobs in america and the fact that we are creating jobs. the european news is crucial. but it comes and goes. don't get too excited about any one thing there. at home, three really important things happen that should make americans happier. one, peter referred to it. u.s. added more than 200,000 jobs. two, home sales jumped most in over a year. and three, business confidence. america's manufacturing zone, heart of where we make things in this country popped. earlier i talked to the director of the economic council, gene sperling, and asked him his reaction. >> it's always nice to see the market going up and seeing confidence strengthen. our fundamental focus is on making sure we have the type of growth over the next 12 or 18 months to make sure that we are seeing job creation that will start bringing the unemployment rate down and the concern obviously, erin, is that with growth projected only a little over 2% right now, if we don't get something like the payroll tax cut that the president's proposing now, it could be a real hit for our economy. so that's why our number one focus is focusing on what we can do, which is cut payroll taxes in half for every worker, every small business, private sector estimates said that could mean an additional 600,000 to a million jobs next year. that's critical in helping us dig out of this great recession that we're still recovering from. >> it's a popular tax. both sides of the aisle, everybody likes it. paying for, another issue. let me ask you two questions on that. one, the costs i've seen are $110 billion, $115 billion to provide that payroll tax relief. that's money that isn't going into funding social security, which is what that tax is intended to do. are you willing to write that into legislation we'll find that money because now it's two years and it's a popular tax cut, you know, hey, could be years before we start put money back in that social security fund. >> so let's be very clear. the way that this tax cut happened in this year and we're proposing next year would be that you would absolutely, by law, strict policy, every penny would be replaced with social security trust fund. would not hurt social security one penny. >> where would it come from? >> you transfer from general revenues to make sure that you are not doing anything to hurt social security. the way the president's proposed this right now is that we would raise enough money to pay for this so that it would not affect general revenues or affect the social security trust fund, and we do that by asking the 300,000 americans who make over a million dollars to pay just a little bit more in the future and that money is then used to give a tax cut to every small business in this coming year and every worker. >> are you going to keep putting forth, though, surcharges of a percent here or there to pay for your agenda on those same people? >> we've put forward our budget and we've -- this is the only thing that we have in our budget that is on high income people that pay for this initiative. but we do call for not extending the most high tax cuts for the most high income americans preserving those for those who make under $250,000. but the key, erin, is just the balance. that we need -- you need in fiscal discipline a grand compromise. we know what that means. it means that we are going to have to cut spending significantly. it is going to mean sacrifice for many americans. >> one final thing, gene. looking at the bush tax cuts, i'm curious how you see this. if you let them go away for those who make over $250,000 and have them revert to the higher rates, you raise about $670 billion, $680 billion. if you let them go away for everyone, you raise $2.8 trillion. that's a lot of money. and i'm wondering how you intellectually get around the fact that raising it on the high end might help a little bit but it doesn't get you anywhere near as much money. >> that's why you need a balanced package. that's why the package the president put forward called for $2 in spending cuts for every dollar that you have in revenues. it needs to be a balanced package. we don't think putting that whole burden on the middle class makes sense through spending cuts or medicare cuts or education cuts. if we're doing revenue, we think it make most sense to ask those who have done the best in the economy over the last ten years to pay a little more as opposed to taking away tax relief from working families working hard and struggling still in this economy. >> gene sperling, thank you so much, as always. >> thank you. >> "outfront" next, noouewt gingrich or newt leroy gingrich. i love that's his full name. he's getting ready to hold a slice the deficit pizza party in iowa. will he stay number one ins polls? 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[ john ] i'm grill master john mazany. i'm grill master adrianna hollis. and we sea food differently. gives you the lowest plan premium in the country... so you can focus on what really matters. call humana at 1-800-808-4003. time now for the political play with none other than our own john avalon. john. >> >> how are you, erin? the political play of the day is the inevitability fail. this idea that mitt romney's campaign has been the inevitable nominee took a major ding this week. romney has gotten a lot of bad news. horses are spooked and you can see that in an interview he did last night. let's take a look. >> brett, i don't know how many hundred times i've said this too. this is an unusual interview. all right. let's do it again. absolutely. what we did in massachusetts was right for massachusetts. you're wrong, brett. no, no. bret, new york the tape out there -- continue to read the tape. >> the normally unflappable mitt romney was rattled last night and there's good reason for it. let take a look at some of the polls in key states. first of all, iowa, newt gingrich up 27 to mitt romney's 20. he said he'd play there two weeks ago might be regretting that decision. new hampshire, this has been mitt romney's stronghold. after union leader support, he's to 27 to newt 31. now south carolina, social conservative strong hole new york surprise here, newt gingrich, 33, mitt romney, 21. now to the big one, florida. this is where it comes together in the republican primary. in a new poll out, it shows newt gingrich 41% to mitt romney's 17%. no amount of congressional endorsements can take away this sting. the romney campaign has a real problem. let's look at some of the trends behind the numbers. this is the presidential and positive intensity index that gallup does, tells the whole story. midsummer, newt gingrich's campaign was as good as dead. mitt romney riding the high. this fall, like lazarus, the highest of any supporter, while mitt romney had his lowest mark on record at precisely the wrong time. look, this does kind of bring to mind the hillary campaign in 2008. remember, she was the inevitable nominee. she all the smart money on her. she has endorsements but it didn't come together at the end of the day because she didn't see barack obama rising until it was too late. look, in politics, as in sports, the best defense is a good offense. if there's one thing we've learned in presidential politics, nothing is inevitable. erin? >> it's pretty amazing when you look at that. by the way, newt gingrich sliced the deficit pizza party. in council bluffs, iowa. has now begin. let's bring in republican strategic and democratic strategist maria cardona. i want to start with you. hillary clinton was hit by this. everybody thought she was inevitable candidate. she didn't see barack obama until it was too late. what can newt gingrich learn learn from hillary clinton? >> i think he has been taking some great lessons and some great notes, which is never assume anything. i think john is right that mitt romney could be in trouble because he's been running from the beginning as if he's owed this. as if this is his for the taking. and that's exactly the wrong position to take, believe me, i know. what you need to do is run as an underdog from the very first day you jump into the campaign. no matter where you think you are, no matter what the polls say. that's the only way that you're going to run successfully if that's where you're going to go ultimately, because that means that you're not going to take anything for granted. again, to john's point, that's exactly right. you can never take anything for granted. a day is a lifetime in politics. anything can happen. you need to be prepared. >> rich, you served as newt gingrich's press secretary when he was the house republican whip, also a communications director when he was speaker of the house. do you think that newt can hold this? so many talk about his propensity to cut himself off at the knees. >> well, there is that, but we don't know. >> there is that. >> it's true. we've seen it three or four times. let me make a couple of points about what everybody has said. one, that if you would have had the same conversation at about the same point in the rise of not so much bachmann but certainly perry and then again cain, it looked like the same thing. suddenly, romney was in second place and what was going to happen was going to happen. that's number one. number two is the hillary comparison doesn't work unless a john edwards type also joins the top three. so far, there's always been a top two, romney and somebody. four years ago, it was john edwards that really zapped hillary's strength. in iowa, as an example in the caucuses, barack obama won with 38% of the vote. so 62% of democrats wanted somebody else. hillary and edwards split that 30/30. if either one jumped ahead of the other -- >> it would have been completely different. the hillary comparison doesn't work as well as we like to think it because somebody thought of it. >> here's why i think it matters. this high stakes game of musical chairs, newt gingrich is in the right seat at the right time. at this point in the campaign -- >> even if he comes down, you're at a point, a month away. >> riding this out. with five weeks out from iowa. and here's the other thing. at this point in the game, these polls are not simply snapshots of a horse race. they indicate real trend and the gravity is taking a toll on the romney campaign while newt gingrich is getting wind in his sails at precisely the right time. >> i have no idea why you're saying that. it doesn't make any sense. >> closer to the actual polling date and primary date are the ones that matter. in the summer, it's academic. it's a snapshot. >> florida -- let's take -- it's not until january 31st. you have two months to go. >> you think mitt romney is happy with these numbers? >> no. of course, everybody wants to be first. to flatly state that romney is done for is just foolishness. >> he's not done for, of course not, rich. >> what about what john was saying about new hampshire. where mitt really was the presumptive nominee, he had such a lead. now it's almost, not quite, but almost within the margin of error. >> if we're going to talk about polling, here what happens you have to do. with political polls, you have to -- first of all, you can't take one poll and try to draw a graph. you don't know where the lines will go. take a couple of polls. you throw out the high one and the low one. like figure skating scores in the olympics. you knew the east germans and french were cheating so you threw them out and what's in the middle is left. do i think romney is going to beat gingrich in new hampshire? i don't think so. >> i didn't know the french were cheaters, the germans i knew. i learn something new every day. >> here's the point, no one has said that romney is out of this. but he is in trouble because of two things. first, he has not been able to go above the 25% ceiling and secondly, we still know the reason is because conservatives do not trust him. he has been a major flipflopper on not just one, not just two, but every single major issue that is facing this country today. what has been so flabbergastingly surprising to me is that know contender as of now -- and i think newt gingrich will go after this -- has been able to take advantage of the flipflops. there are things on the record that mitt romney has said that is complete polar opposite of the mitt romney four years ago. and if you're a voter, do you not want the person who is representing you without a core value. >> it is interesting, though, when you look at personal lives, and who is the most conservative? clearly, you look at newt gingrich and mitt romney. it would be mitt romney. >> mitt romney has had an impeccable personal life. the only poll that matter is is election day. the trend is not mitt romney's trend. the aura of inevitably is off. he knees to star playing offense. >> timing is everything. >> and he has started doing it. i absolutely agree. they have data that agrees with you that they need to get out in front of this. >> all right. thanks to all three of you. the bottom line, people like an underdog. maybe mitt romney's trend going down will help him, who knows? tonight newt is at the pizza pie slice the deficit party. eating pizza and not ripping off the cheese, like mitt romney. all right. country singer mindy mccready could be facing trouble. a florida judge has ordered her to produce her son zander by tomorrow or face consequences. the problem is that mccready says he's not missing. her publicist says the boy's been with her for the past month. the other problem is she doesn't have legal custody. that's the issue of defining missing. her parents have custody. >> after a surprise visit by the department of children and families, the boy was nowhere to be found. we invited ms. mccready to come out front. her publicist tells us she's pregnant with twins and is resting. we want to bring in legal analyst jeffrey toobin on this. thanks for weighing in. mccready says she's in a legal battle to get her son back and her publicist says since january of 2011 she's been desperately advising the court that he's in danger, physically and emotionally and as a direct result of being a mother, ms. mccready took action to ensure her son's safety. what do you make of this case? >> well, obviously it's a family mess. mccready cannot do this. if a court says her parents have custody, her parents have custody. she can go court to try to get that changed but the law does not allow you to have self-help to have you decide that your child belongs somewhere differently than with what the court said. she legally if she's defying this court, is clearly in the wrong. >> what consequences should she be facing or could she be facing? i will note there's been no amber alert. >> right. they apparently know where the child is. but it's not -- the child is not with the people he's supposed to be with. the legal custody -- the legal ramifications can range. worst case, she could be charged with kidnapping. i think that's very unlikely. a judge will ultimately get this case again about custody and the judge will say, look, you defied the court, i'm going to take that into consideration in deciding whether to give custody to you. it's important to remember, mccready was just on celebrity rehab. she's had a lot of drug problems she's had issues involving addiction. so it's not surprisin