Chris Taylor's declaration of independence from the financial markets is stirring stuff. The Business 2.0 editor, noting the obliviousness of young tech entrepreneurs to last week's stock market tumble, comes to the confident conclusion: "Silicon Valley no longer needs Wall Street." It's a great line built, unfortunately, on a particularly weak argument. Business 2.0 expects that "cash-rich superpowers" such as Google, Yahoo and Amazon will provide more comfortable homes for startups than the public markets on which they relied during the last cycle. Well, yes, but only if the superpowers were actually parting with their cash. Hasn't anyone noticed that the internet acquisition market is moribund?

Amazon's shareholders seem to have less patience for Jeff Bezos' quirky adventures; he's finding an outlet for his startup love in personal investments. Yahoo's still having difficulty integrating acquisitions such as Flickr, which it will merge its inhouse photo sharing service next month, and Overture, the basis of the company's troubled text ad program.

What about Google? Both its big acquisitions — of radio ad network, dMarc, and video sharing site, Youtube — have been problematic. In exploring the development of a new mobile device, the Mountain View search engine hired one of the leading handset designers rather than buy his company. Google appears more confident of its ability to innovate inhouse than to manage the risks of an acquisition.

Here's the sobering fact that most Valley startups don't want to acknowledge: there hasn't been a big deal since the Youtube sale, for $1.65bn, six months ago. The signature transaction these days isn't a quick flip to Google. It's the extraordinary prices paid by private equity investors, for stakes in companies such as Brightcove and Glam Media.

And those private equity firms — many of them staffed by Wall Street exiles who simply started taking the train up to private equity houses in the Connecticut suburbs, are funneling money as recklessly as their counterparts ever did back during the last bubble. Silicon Valley may no longer need Wall Street. It needs Greenwich, Connecticut, instead. The more things change, the more they stay the same.

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