It's kind of debatable what the “song of the summer” is this year. There's no obvious pop-hit winner like last year's “Get Lucky.” But one song you hear over and over again right now is “Turn Down For What,” by DJ Snake and Lil Jon, which prominently features Lil Jon screaming “TURN DOWN FOR WHAT!” over and over.
Anyway, what you might not have realized is that the song is a perfect metaphor for what's happening in the market these days, at least according to Jefferies market strategist David Zervos.
In his note to clients Monday, Zervos explains the gist of the song, “It’s basically a song about keeping the party going, with Lil Jon singing over and over again - ‘Fire up that loud/Another round of shots’.”
“Lil Jon is essentially asking, why should we stop the party - why should we ‘turn down’?,” Zervos continued.
And well, this is exactly what the bulls are thinking these days. Central banks are being accommodative and there's nothing on the horizon that the party should turn down for. Janet Yellen is still doling out the shots, and in fact, now there are signs that economic growth is becoming self sustaining.
And while Lil Jon is responding to haters demanding the party stop, the market has its haters too. These haters are the people who never got into the party, and always had some reason why it had to end. And each time it was ridiculous.
Of course we will still have to put up with hater drivel from the other side of the red velvet rope. These folks never entered the club over the last 5 years, or came in briefly and left way too early. They never partook in the Jell-O shots - they just simply “turnt down”…and for what? For a make believe US fiscal policy crisis, a make believe peripheral European crisis, a make believe Chinese trust product crisis, and the list goes on!!! But most importantly these folks “turnt down” because they never believed in the true reflationary power of QE. Instead they consistently looked for some reason for the party to stop in order to justify the fact that they never participated in one of the greatest risk-on raves in history. Sad!
Now, says Zervos, the haters are praying for some Portuguese bank collapse or a CPI spike that causes a sudden tightening. But for now, there's just no reason to turn down.
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