The New York Times has an noteworthy piece in today’s paper “Too Much Capital: Why It Is Getting Harder to Find a Good Investment”

For entrepreneurs out there, this is great. Let the venture capitalists worry about the capital problem. They’re getting flooded with cash from their own desperate investors, and ancedotal evidence suggests that VCs are getting better terms — negotiating to keep a higher percentage of profits from their investments, vis-a-vis their own investors. Gary Morgenthaler, partner at Morgenthaler Ventures, told us yesterday: “Life’s a bowl of cherries right now.” But it means they’re eager to keep investing in good ideas. As the NYT article suggests, there are just not enough ideas out there to supply all that demand. So if you think you’ve got a good idea, you’re marginally more likely to raise more money now.

True, the logic of the NYT column meanders at times, but gist of it matches with things we’ve been contemplating for some time: Evidence of the capital glut can be seen in interest rates. Market rates are low, and even when central banks set out to raise short-term rates, longer-term rates are slow to move. Little additional yield is available to those who buy very risky bonds. For the same reason, stock prices are high. Profit disappointments may not cause the stock market to plunge, since the capital will have to go somewhere.

Or are we reading this entirely wrong? Feedback?