Housing Bubble Coda: Goldman Squid Settles

It’s tentative, but Goldman Sachs has a deal to settle its housing bubble MBS hangover with the D.O.J., the NYS and Illinois AG offices, FHLB of Chicago and Seattle and the National Credit Union Administration to the tune of $5B+ USD, in the form of $2.385B USD civil penalty paid, $875M cash and $1.8B USD in “consumer relief” (e.g. principal forgiveness for underwater mortgages). It’s not sealed and delivered by the market will treat it as such and this will be on the heels of it upcoming Jan 20 earnings report, which the Street had already discounted year-over-year Q4 from just shy of 4.4/sh down to about 3.6/sa. It’s kitchen sink time: “Fixed Income” bank desks have been getting culled (regulatory balance sheet costs plus customer woes), 2015 related headaches (extra “I …drink…your…milkshakes”) and now a bookend for circa 2005 MBS excess.