Poor Goldman Sachs

It’s kind of ticking me off that Goldman Sachs received only $10 billion of taxpayer money in Paulson’s latest “plan.” The firm is severely undercapitalized and needs help. Its greater need for equity infusion as against other less deserving companies is clearly shown in the following charts.

Over the last decade, Goldman Sachs is up only 120% as against the S&P 500 Large-Cap Index. Poor Goldman Sachs.

The chart below is also pretty ridiculous in showing that Goldman has outperformed the Dow Jones Industrial Average by only 100%. The Dow is so old economy, filled with clunkers like GM.

GS's advantage over the tech-heavy Nasdaq-100 has been pared back from the glorious 275% advantage of a few years back, but we're still bullish. Tech doesn't really contribute much to the economy. Here's hoping that we can hold the early 2006 breakout at about 150%.

Coincidentally, our hero sprang into action on the day, September 18, 2008, that his old firm threatened to break below the long term Goldman Sachs: Russell 2000 ratio. Not gonna happen.

The following chart shows Goldman powering ahead of the Wilderhill Clean Energy Index. It confirms, of course, Efficient Market Theory. Previously I had been skeptical of that idea. Now I'm a believer. Taxmoney should go into the superior business model, as demonstrated by the record of the investment banks. That way, we can compete in the world economy. Alternative energy is for hippies. Let the market decide.

In conclusion:

In a world of uncertain values, we need a new standard of value. So to hell with the gold standard and the Dow:gold ratio favored by bears. Gold is a barbarous relic. Until January 20, 2009, at least, the coin of the realm is the Goldman standard.