** Goldman Sachs put out a doozie of a research report late on Monday that said the 4 percent drop in home prices was just the beginning, and declines may have another 13 percent to 14 percent to go. While the report focused on the implications for financial markets and consumer credit, Goldman also said that any uptick in the mergers for the financial sector may be another 12-18 months away.

“Despite attractive valuations, we do not believe a broad wave of industry consolidation will occur in the financial sector for another 12-18 months,” Goldman analysts said. “Credit risk, balance sheet deterioration, and business model risk continue to outweigh low valuations and funding synergy benefits.”

** U.S. buyout firm JC Flowers submitted an offer for Northern Rock, according to a person familiar with the situation, as shares in the British bank tumbled on fears that any offers will be low. The overture from JC Flowers, which has been trying to end its $25 billion pact for student lender Sallie Mae, includes an offer to Northern Rock shareholders at a “nominal value”, the person told Reuters.

** Mining group BHP Billiton Ltd. continues to press its case for a massive acquisition of rival Rio Tinto despite opposition from several investors. Rio Tinto, meanwhile, may counter by offering joint ventures with BHP as an alternative to a deal, Britain’s Daily Telegraph newspaper said.

** UK-based buyout firm Candover Investments said it agreed to sell Norwegian cable television company GET for 5.8 billion crowns ($1.05 billion) to a group of buyers led by rivals Quadrangle and GS Capital Partners, Goldman Sachs’ private equity arm.

** Investment Corporation of Dubai, an agency which pools some of the Dubai government’s biggest holdings, said it is looking to benefit from the U.S. mortgage crisis to buy into troubled U.S. financial services companies. Mohammed Shaibani, chief executive officer of the Investment Corporation, told reporters that Merrill and Citi shares are still too expensive, however.

(Photo, Reuters file)