A plaque remaining from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem.

Above, a 1934 plaque from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem. Discarded as trash in 2006.

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Entry from April 25, 2012
Axe (bad financial asset)

Greg Smith, an executive director of Goldman Sachs. wrote the Op-Ed “Why I Am Leaving Goldman Sachs” in the March 14, 2012 New York (NY) Times, stating in part:

“What are three quick ways to become a leader? a) Execute on the firm’s ‘axes,’ which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit.”

An April 19, 2007 internal Goldman Sachs email mentioned “GS Syndicate Structured Product CDO Axes” ("CDO" is “collateralized debt obligation”). It’s not known who coined the “axe” term, or when it was coined.

On March 16, 2012, Jacki Zehner replied to the Greg Smith Op-Ed, writing “‘what is your axe?’ Meaning what are you the best buyer or seller of today?” This appears to be a different use of the term “axe.”


Black Star News
Goldman Sachs: Still Doing God’s Work
By Edward Manfredonia
07-02-10
(...)
On March 8 Daniel Sparks, a Goldman manager, sent an e-mail in which he referred to “a dramatic credit environment downturn” and reiterates that Goldman is “still net short.” So anxious was Goldman to sell Timberwolf that Sparks suggested special incentives to Goldman’s sales team to sell Timberwolf.  On April 19, 2007 Sparks sent an e-mail titled, “UPDATE” GS Syndicate Structured Product CDO Axes (INTERNAL) [T-Mail], to Bunty Bohra that read:  “Why don’t we go one at a time with some ginormous credits- for example, let’s double the current offering of credits for timberwolf.”

New York (NY) Times
Op-Ed Contributor
Why I Am Leaving Goldman Sachs
By GREG SMITH
Published: March 14, 2012
(...)
What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit.

Wall St Daily
“Goldman Letter” to Wall Street: It’s Time to Come to Jesus
Published Wed, Mar 14th, 2012 Louis Basenese
(...)
For example, take the charge that Goldman Sachs employees were regularly promoted for executing on the firm’s “axes.” Or as Smith says, “Persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit.”

In case you forgot, Goldman Sachs paid $550 million to settle a lawsuit in 2010 for “allegedly” doing just that. Specifically, misleading investors into toxic collateralized debt obligations (CDOs).

Jacki Zehner
March 16, 2012
“Why I Left Goldman Sachs” (VERSION TWO)
This is a longer and still far from perfect post in response to the recent OpEd in the Times.
(...)
The most common question asked every single day to me for 10 years as a trader was: ‘what is your axe?’ Meaning what are you the best buyer or seller of today? What this does is allow the salesperson to go to his client and let him or her know what her trader wants to do and thus become the best buyer or seller of. This is called a win/win.  This approach worked when there was relationship and that relationship was based on telling the truth.

Civilians News
The Truth About The Power Of Goldman Sachs
April 10, 2012 2:43 pm
(...)
In another instance Goldman Sachs was noted selling European investors what were widely considered “toxic” mortgage assets, while simultaneously betting against the same assets on the NY Stock Exchange. Executives at Goldman Sachs reportedly referred to these “bad financial assets” as “axes,” a nickname for terrible investments Goldman Sachs non nonchalantly pressured their clients to purchase, while simultaneously betting against the assets themselves.

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New York CityBanking/Finance/Insurance • (0) Comments • Wednesday, April 25, 2012 • Permalink