Vanguard Founder Warns Of Difficult Economic Times, Drawn-Out Credit Crisis
John Bogle, the founder and retired CEO of the Vanguard Group, appeared on Bloomberg Television earlier today from Valley Forge, Pennsylvania. Bogle warned of “difficult economic times that very clearly lie ahead.” He added:
We’re going into something, or are in the midst of something, you might call the great unraveling, of all that excess credit, all that low-quality credit, that built up to such enormous levels in, say, the previous decade. So, that’s going to take a long time to unravel.
Bloomberg’s Betty Liu asked Bogle how far along he thought we were in the credit crisis. Bogle, who is still active with the second largest fund family in the country, replied:
None of us really know. I’m certainly among those that don’t know. But I’d say a third of the way through would be more like it. I’d say we have several more years to go. And they’re not going to be fun years for any of us.
He also added that he expects more bank failures and more bailouts during this time. According to Bloomberg, there have been $509.6 billion in credit losses and asset write-downs since the beginning of 2007.
You can view the 7 minute 12 second interview here.
Source:
John Bogle Interview
Bloomberg, September 3, 2008
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