It went about like this:
His original tweet sounded like a sort of empty thing someone would say to blame consumers and firms who aren’t feeling confident for not feeling confident, so it seemed like a good time to pick an internet fight.
I was probably wrong though. Here’s FRED’s graph of DJIA percent change with real GDP percent change overlayed:
They seem, you know, related, so I downloaded the data, and unlagged, once lagged, and twice lagged regressions of DJIA percent change all had significant and small positive coefficients (with t statistics of 2.41, 4.33, and 4.51, respectively). Those coefficients were always under .1, but the idea of the stock market reacting about ten times as strongly as it needed to to new information isn’t that hard to stomach. The twice lagged regression also had the highest R2, which would be consistent with a story of something like optimistic portfolio investment preceding real investment. That highest R2 was admittedly only .0763, but still.
I’m curious about the channel (and whether the insane amount of cash corporations have been hanging onto might break any corporate wealth channel), but this for me was a surprising result.