If Yellen thinks social media, biotech, and possibly stocks were beginning to defy gravity this summer (2014), frankly, she hasn't seen sh*t yet. Irrational exuberance, driven by a phase transition of energy, can drive 'valuations' and equity trends to unimaginable extremes.
Biotechs despite a general stock market correction have broken out to new highs (chart).
Headline: YELLEN TAKES DEAD AIM AT SOCIAL-MEDIA COMPANY VALUATIONS
Federal Reserve Board Chair Janet Yellen is warning that social-media companies' share prices, and those of other high-flying stocks, are starting to defy gravity.
In her just-released full report to Congress on the state of monetary policy, the Fed chair says, "...Valuation metrics in some sectors do appear substantially stretched—particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year."
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