Silicon Valley Bank (SVB), the favored lending institution of Silicon Valley tech start-ups and venture capitalists, was seized by federal regulators Friday afternoon. SVB, a top-twenty bank, became insolvent as it fell by a good, old-fashioned run on the bank. READ: Feds Take Over Silicon Valley Bank in Biggest Bank Failure Since 2007. The CEO, Greg Baker, who unloaded $3.6 million in SVB stock since January — purely coincidental, I’m sure —  resigned as a Federal Reserve Bank of San Francisco director (see Silicon Valley Bank CEO Sold $3.6M in Stock Before Collapse, Mysteriously out as Fed Reserve Board Member).

The potential damage of the second-largest bank failure in US history is significant.

Silicon Valley Bank is the second largest bank failure in USA history.

The largest casualty so far to the free money printing spree of the government during COVID, which triggered inflation. pic.twitter.com/jKhnAdmzxW

— DAN DOUGHTY (@dbdoughty_) March 10, 2023

The FDIC covers deposits up to $250,000. Only 2.7% of SVB’s deposits were fully insured, the second lowest percentage of fully insured accounts in the top 100 banks.

Only 2.7% of Silicon Valley Bank deposits are less than $250,000.

Meaning, 97.3% aren't FDIC insured. pic.twitter.com/GQP9o9mhWt

— Genevieve Roch-Decter, CFA (@GRDecter) March 10, 2023

Many of them were corporate accounts holding millions of dollars. One estimate is that over 30% of the venture capital funded companies will be unable to make payroll next month due to their losses at SVB.

Silicon Valley Bank has 50% of US VC-backed startups as customers

There are over 130,000 VC-backed companies, according to PitchBook.

That's nearly 65,000 startups that used SVB. pic.twitter.com/axB2WCEOM2

— Genevieve Roch-Decter, CFA (@GRDecter) March 10, 2023

30% of YC companies exposed through SVB can’t make payroll in the next 30 days.

If you or your company are affected, I recommend that you reach out to your local congressman to get this on their radar TODAY.

Now.https://t.co/XMhSAGAn2L

— Garry Tan 陈嘉兴 (@garrytan) March 10, 2023

Also hurt will be China.

Panic in China, where SVB has played a hugely important role in the country. Chinese startups can’t raise money from overseas investors in foreign currencies without offshore bank account. Opening an SVB account has been the easiest option. https://t.co/M6F0CCU8OS

— Kate Clark (@KateClarkTweets) March 10, 2023

It even managed to damage companies that are against using money.

BREAKING: Crypto bank BlockFi had $227 million in Silicon Valley Bank, which has now collapsed.

— The Spectator Index (@spectatorindex) March 10, 2023

Naturally, because the companies facing insolvency are a sector of the economy favored by the left, backed by very wealthy companies that favor Democrats, and employ people who are mostly on board with the Diversity, Inclusion, and Equity craze, the calls for a government bailout are starting.

I think either California or the Treasury Department should backstop Silicon Valley Bank – thousands of companies will fold or lay people off next week because of lack of access to accounts through no fault of their own. Take the equity and fire the managers. But SVB’s clients -… https://t.co/YnQ73wQcMV

— Andrew Yang🧢⬆️🇺🇸 (@AndrewYang) March 10, 2023

After what the Feds did to @jpmorgan after it bailed out Bear Stearns, I don’t see another bank stepping in to help @SVB_Financial.

— Bill Ackman (@BillAckman) March 10, 2023

I’m working with my CA colleagues to address the Silicon Valley Bank crisis. We must make sure all deposits exceeding the FDIC $250k limit are honored. Banking is about confidence. If depositors lose confidence on the safety of their deposits over 250k then we are in trouble.

— Rep. Eric Swalwell (@RepSwalwell) March 10, 2023

And no list of people making excuses for giving taxpayer money to monied interests would be complete without Mitt Romney.

Silicon Valley Bank’s shareholders and executives lose it all, as they should. Depositors in good faith, however, should recover and have access to their deposits in order to meet their payrolls, pay their suppliers, and to prevent contagion.

— Mitt Romney (@MittRomney) March 11, 2023

I imagine the Federal Reserve will find some way to rescue the depositors. I’m ambivalent about that – I suppose it will happen – but I have to ask them what part of ‘guaranteed up to $250,000’ didn’t you understand? Bill Ackman says what he’s hearing is grim.

From a source I trust: @SVB_Financial depositors will get ~50% on Mon/Tues and the balance based on realized value over the next 3-6 months. If this proves true, I expect there will be bank runs beginning Monday am at a large number of non-SIB banks. No company will take even a… https://t.co/2BoqtCDKJt

— Bill Ackman (@BillAckman) March 11, 2023

A lot of folks are claiming that not making depositors whole will create a loss of faith in the system. From my point of view, the problem with our financial system is entirely too much faith. Bankers have mutated from the ultra-cautious figures of the 40s and 50s into casino hustlers. Staid, fiscally conservative local and regional banks have been absorbed by behemoth companies who insulate themselves from the consequences of their actions by being “to big to fail.”

The availability of government bailouts to depositors and investors has prevented anyone from learning the lessons of the past. With barely a decade separating us from the 2007 catastrophe, you’d think that someone would remember that when gambling with investors’ money.

I will NOT support a taxpayer bailout of Silicon Valley Bank. pic.twitter.com/s3wAV26iNL

— Rep. Matt Gaetz (@RepMattGaetz) March 11, 2023

I hope Matt Gaetz gets support in the House and the Senate. We need to draw a line in the sand here, for the good of the financial system and the nation. If you are a bank and become insolvent, you will be shut down. If you have more than $250,000 in your insured account, you’ll get back the exact amount that is insured. Companies that fold, even if they are cute little tech companies with bazillions in venture capital backing, are just roadkill. We can’t afford to perpetually subsidize the lousy judgment and cavalier attitude that seems to infest the financial services and banking industries any longer.