Is Goldman Sachs Responsible For Every Bubble?

Goldman Sachs (GS) has been at the center of several global conspiracy theories, especially since the financial meltdown. I had previously highlighted a heavily anti-Goldman website and their legal maneuvers meant to quell dissent. Today, I came across this article and set of videos published in Rolling Stone basically blaming Goldman Sachs for the creation, manipulation, profiteering and crash of every bubble we’ve seen recently. The article is interesting to say the least. Contrary to the claim that Goldman has the power structure in their pocket is this massive fine they were hit with for their role in the housing crisis, but in general, Goldman did emerge from this recent collapse relatively intact.

While I had admonished those citing speculators as being responsible for the increase in oil prices and have since hedged my gas prices personally, if there is anything to this notion that Goldman rules the world, if you can’t beat ‘em, join ‘em, right? I was thinking about who survived the crisis and who didn’t…who can repay TARP and who can’t…who benefited from the bailout via counterparty passthroughs from AIG (AIG) that otherwise would have decimated them…and then I took a look at their chart vs. the general markets.

Goldman has outperformed the S&P500 (^GSPC) in stellar fashion since launch to the tune of a 100% Gain over the past 10 years vs. a loss of 37% for the S&P500. That’s hard to believe, but yes, we’re down that much over the prior 10 year period. As naive and elementary as the question is, it begs asking:

If Goldman Rules the World and will continue to do so for the foreseeable future, why not hold common shares?

Disclosure: I have no position in GS at the moment.

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