The markets are imploding and Washington is dickering. What is Silicon Valley doing? Thinking about cupcakes, cutbacks, and cushy relationships with sources. Google's Larry Page is so out of touch that he went to D.C. to whine for more bandwidth for all of his Googlephones to come. And fabulously wealthy VC Tom Perkins? He's bringing his megayacht home, the better to sell it some even more nouveau rich guy to buy. Has he looked up Kevin Rose, we wonder? (Photo by sanfranannie)

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