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Financial Sector a 'Drag,' Says Vanguard Founder

The financial sector is a drag, according to John Bogle, founder of the Vanguard Group.

"I think this is an issue of greed on Wall Street," the man who created one of the world's leading mutual fund companies said on CNBC's "Squawk Box." "I think it's an issue of the financial system overwhelming the rest of our U.S. economy. The financial services business made more money in 2006, around $250 billion profits, more than health care and technology put together...it's really dragging money out of the system, rather than adding value to the system."

And in cases like Bear Stearns , there's a personal cost, he noted.

"The employees at Bear owned something like 30 percent of the stock, so we're dealing with a cataclysmic kind of a personal event for an awful lot of people."

And there may be more to come, he cautioned.

"I'm not breathing any easier yet. After all, one has to begin by looking at the Fed's balance sheet, and they've got about $860 billion there, and they've committed $400 billion. So, as it's been observed, the tank is about half-full now. They're limited. They can't do everything."