Philippe Legrain is the author of several books, such as «Open World: The truth about globalisation«He has also been and is a very influential person in EU economic policy. Not for nothing has he been a senior advisor and head of the analyst team of the Bureau of European Policy Advisers for the President of the European Commission José Manuel Durao Barroso. And as such, has led the team that has directly advised the EU's strategic economic policy.
Well, from his privileged perspective, Legrain has recently published an article in the Financial Times entitled «.«Investors are ignoring eurozone risks«This is in line with our opinion, which we have reiterated in several articles about the mirage of bonanza that the markets are quoting with respect to the European peripheral economies: «...the European Union's peripheral economies are in a state of crisis.«Mátrix and the green shoots«, «The double standards of bubbles«and many others.
Below is a free translation and commentary of Legrain's article:
Peripheral bond yields are reaching bubble proportions. Markets awash with liquidity both camouflage and exacerbate long-term economic problems and insolvency. Investors and policymakers should have learned that lesson in the pre-crisis bubble years. Yet they have gone from hysterical panic to short-sighted complacency in less than two years. (more…)
We all shudder (or should shudder) when we contemplate the possibility that our money is invested in assets whose prices are at what is known as a «bubble», i.e. at levels far higher than their real intrinsic value, the result of unfounded speculation. Investing in bubbles is the mistake we all want to avoid at all costs, because if they burst, the losses will be irrecoverable or, at best, it will take decades to recover the value lost. Because, if the capacity of those assets to generate Value does not increase considerably, those prices at which we buy wildly will not occur again without the help of a new bubble on that same asset, which may never happen or take more years than our own 
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Investment gurus such as Warren Buffett have it ingrained in their very DNA: Investing is like playing any sport whilst focusing on the game itself, whereas doing so whilst focusing on the score is pure speculation. The matches, the championships and the well-deserved glory go to those who focus on the pitch – on constantly improving their strategy and competitive skills when selecting companies in which to invest – rather than on the absurd speculation of managing a digit displayed on a neon sign, which, incidentally, is as volatile as our own incompetence.
The party continues. Following the rallies on the American and European stock markets – particularly the Spanish one – it seems that most investors are set to stumble over the same old stumbling block once again. When? It’s impossible to say for certain, but what is certain is that the stumbling block is there and investors, giddy from such a rally, are running about like headless chickens. And what is this stumbling block that so many are set to trip over? Well, logically, it’s the valuations in developed stock markets, which are by no means cheap any longer – not to mention that they’re already starting to look expensive. Especially when we bear in mind that corporate profits are at record highs and interest rates at record lows, which inevitably brings us closer to the end of this cycle and the start of the next.
