Want a window into the size of the problem in financial services? Listen to Jack Bogle rattle off the following three numbers: $56 trillion, $1.6 trillion, and 1.15 percent. They illustrate the professional and ethical decay out of control in the financial services industry that the 84-year-old rails against, present tense:
"It's not time for me to slow down," the Vanguard Group founder told a crowd of about 600 people who came to the Bryn Mawr Presbyterian Church near his home on Philadelphia's Main Line on April 28 to hear his analysis of rising costs and ethical problems in the financial system. (Bogle began the first index fund in 1974—passive strategies, such as index funds, now account for about a third of equity assets. Malvern, Pa.-based Vanguard Group has $2.5 trillion in assets.)
Bogle's mantra is the idea of buying and holding stocks and bonds for the real value underneath—the value of the goods and services produced by the companies. He used the three numbers to draw a contrast between this value-generating part of the economy and the speculators in the financial services sector who try to make money off the movements in the market.