Warnings grow that stock market bubble could burst 16 Jan, 2021 11:25 PM 3 minutes to read Ballooning valuations risk bursting if economic output cannot catch up with investor optimism. Photo / Getty Images Ballooning valuations risk bursting if economic output cannot catch up with investor optimism. Photo / Getty Images Other By: Louis Ashworth and Tom Rees Stock markets are caught in a "rational bubble" that threatens to pop if the economy fails to catch up with record-breaking valuations, one of the world's top market experts has warned. There will be "serious and widespread unintended consequences" if global output fails to return to pre-virus levels, warned Mohamed El-Erian, chief economic adviser at Allianz and president of Queens' College Cambridge. There is "no doubt" that company valuations have become "massively disconnected" from the economy, he said.