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VC activity around the world has ground to a halt.. Is the future of high sector market sectors world wide in serious threat of collapse?

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Many reasons have been suggested for the noticeable decline in VC activity in the last 3 quarters. The most likely explanation is all are sitting on depressed portfolios of Royal Blue Chip Shares ( perhaps down by as much as 50%) or Blue Chip Shares ( down perhaps by 70%) . VCs certainly are not to blame. They had no better visibility that a recession was on the horizon and most with their first Funds ( most have started second 10 year timeline fund) had dismal records of cash management with cash based derivatives and advanced financial instruments that very few CFO's of VC around the world and including Israel really understood.. Portfolio of Royal Blue and Blue Chip "sure thing" shares seemed at the time the best option to invest unutilized fund in. The NY Times in an article early in March 2009  based on interviews with the whose who in US Economic thinking and 8 US Nobel Prize Winners for Economics predicted:-

1. The current and complex world recession will continue for at least one further year -that is through 2011 into 2012

2.. Really pessimistically suggested that it would take share prices a further 4 years after exiting the recession ( and then when will we really know when the recession is over- what indicators and indices should we follow)  for share prices to recover their previous value.

Only Alan Greenspan in an Editorial Commentary of Barron’s on line titled, “The Culprit Is All of US is quoted as warning repeatedly in all his annual reports from 2000 onwards

that GSE (Government Sponsored  Eneterprises) “placed the total financial system of the future at substantial risk”. How right he was. The defaulting of GSE’s with substandard home – mortgages secured by a series (but largely one) of Mortgage Based Derivatives with relatively high yield ( sold at substantial discount) that found its way in the billions of dollars into the investment portfolios of financial institutions around the world but largely in the Us and major Western Banks such as the Swiss based UBS  and Lehman Bros ( two diverse examples)  -was the direct cause of the 2008 /2009 to who really knows until when complex recession. It started in April 2008  and rapidly has become exponentially more complex and will continue to do so as questions are asked about the US deficit and equally $750 billion is needed  per Time Magazine ( 30th March) to bail out the US Financial Industry – the key sector that really is able to increase “demand”. The only previous visibility that all was not well before the GSE domino defaulting of substandard home mortgages was when Starbucks announced in March 2008 that it would be closing 2000 NY franchises. Over 11,000 franchises have now been closed world wide. Is an “American Tradition “of a “Morning Cup of Takeaway Coffee” a real indicator of consumer demand? Ironically it probably is a more down to earth indicator than Dow Jones or any SE index.

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