1. Herman Cain shakes the political world, as he stakes a strong claim to be the next leader of the free world. He leads the Republican Presidential field in both the NBC/Wall Street Journal and PPP polls with 28% and 30% support respectively, with Romney second, Perry, Paul and even Gingrich still in the hunt.
2. Perry pulled in $17 million in the quarter ending September 30 and is tied with Romney in cash on hand. It is an impressive haul for Perry, but can he keep raising big money with his polling numbers falling fast? Cain is breaking all the rules about scheduling and fundraising, going to states that vote later like Virginia and Tennessee, and not camping in Iowa or New Hampshire for all of 2011, as Rick Santorum is doing in Iowa.
3. Hence the establishment and chattering class sneer at the Cain surge by proclaiming Romney inevitably the nominee. Really? A lot of Republican voters seem real interested in anyone other than Romney who has the support of 20% to 25% of Republican primary voters.
4. Is too much inequality bad for economic growth? "The Darwin Economy" by Robert Frank cites data indicating that countries with the highest wealth and income inequalities have the slowest economic growth. The US now ranks among the nation's with the highest wealth inequality. The 400 wealthiest individuals have more wealth than the bottom 150 million people.
5. US stock markets rallied last week and returned to positive territory for 2011, buoyed by a stronger than expected September retail sales report and a week of successful muddling through in Europe. September retail sales were likely helped by falling gasoline prices.
6. For every $10 move up or down in oil prices that is sustained for a year, US economic growth rises or falls about 0.2% to 0.3%. Energy prices matter a lot to economic outcomes.
7. Count me in the camp that holds the US economy will not sustainably recover, until housing prices stop falling and destroying trillions in wealth. One trillion dollars in wealth evaporated from June 2010 to June 2011 when US housing prices fell another 8%. Consumer demand cannot withstand such wealth destruction in the single biggest asset held by most US consumers.
8. Steelers and Eagles both win. Cowboys lose, thanks to the coolest cucumber of them all--Tom Brady who notched another come from behind, last minute victory. Cardinals keep dancing on the Phillies grave and go to the World Series.