re: Goldman Sachs believes the US economy will slow to a crawl next year

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Goldman Sachs Finally Admits it Defrauded Investors During the Financial Crisis

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Investment banking giant Goldman Sachs (GS, -1.95%) has agreed to a list of “facts” in addition to paying $5.1 billion to settle a lawsuit related to its handling of mortgage-backed securities leading up to the 2007 financial crisis, the U.S. Department of Justice announced Monday.

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From 2005 to 2007, Goldman issued and underwrote many mortgages and securities that had been backed by residential loans borrowed by consumers with shoddy credit ratings. That helped tip the economy into recession after the housing bubble burst in 2007, leading to a tsunami of foreclosures and delinquencies. That caused billions of dollars in losses for investors. The settlement mentioned mortgage loans that had been originated by Countrywide, Fremont, and others. Countrywide was bought by Bank of America is early 2008. Fremont is no longer in business.

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“This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail,” said Acting Associate Attorney General Stuart F. Delery in a statement.

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