"The value of the U.S. stock Market was $18 trillion a year ago. And now it's about $9.5 trillion or let's call it $10 trillion with today's rally. Anyone who believes that American business is worth $8 trillion less than it was a year ago I think is a fool," he told Reuters in a telephone interview.
"So there was some water in the system, some hot air in the system, and we blew it out, but I think we have overblown it," he said.
Bogle left the Vanguard helm after a 1996 heart transplant, and now often castigates the Mutual Fund industry as a marketing vehicle run not so much by investment professionals on behalf of investors as by short-term minded entrepreneurs.
"Institutional money managers, including the managers at mutual funds, have a lot to answer for," he said.
"If they were professional security analysts, where were they when they looked at the balance sheets of those banks?" he said in reference to banks that took huge write-downs for their exposure to losses in subprime mortgages that snowballed into the worst financial crisis since the 1930s.
"They joined the speculative frenzy, turning over stocks 100 percent a year. It has nothing to do with investing. It's a great big marketing business," he said.
"Institutional money managers, including the managers at mutual funds, have a lot to answer for," he said.
"If they were professional security analysts, where were they when they looked at the balance sheets of those banks?" he said in reference to banks that took huge write-downs for their exposure to losses in subprime mortgages that snowballed into the worst financial crisis since the 1930s.
"They joined the speculative frenzy, turning over stocks 100 percent a year. It has nothing to do with investing. It's a great big marketing business," he said.
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