The Economic news is mostly negative today with Consumer Confidence dropping below the consensus forecast. MGIC, the nation’s third largest mortgage insurer, posted a third quarter $518 million loss after a record number of homeowners failed to meet their mortgage payments. Bank of America posted a $2.2 billion loss, although $400 million of that was a fee paid so they could exit an agreement with the government designed to shield the company from further losses. Bank of America reported that part of their losses was due to households not making mortgage and credit card payments.

However, there is some good news. Industrial Production has been rising for three months now. The level of 98.5 is a bit low to be consistent with robust economic growth. In recent cycles, Industrial Production index levels have exceeded 100 when the economy was growing. Interestingly, if it continues to rise then manufacturing could lead the United States economy out of the recession. I believe that this would consist of only gradual growth though, as other sectors, namely banking and real estate will likely remain weak for some time after any manufacturing rebound.