Mike Malone

Wearer of hats @smallsteplabs. Dad. I make the stuff that makes the interwebs. Sometimes I do other stuff too.

[Ian Livingstone @ianlivingstone]

Why is security an infrastructure problem?

Join @tnachen and me as we discuss the intersection of security & infra with @mjmalone of @smallsteplabs!

We cover everything from secure enclaves to how to fund verifiable computing!

https://t.co/oRGlKwMWxU

[Ryan Hurst @rmhrisk]

The world needs standards based and interopable Certificate Lifecycle Management. The world Needs ACME. #encryption #tls #standardds #opensource https://t.co/hvtTap3Prh

[Mike Malone @mjmalone]

@kneath Ugh. Big stovetop vent hood manufacturing must be stopped.

[Mike Malone @mjmalone]

If you live in SF and you’ve noticed outdoor seating / parklets disappearing from restaurants, it’s intentional city policy. Make sure you let @LondonBreed know how you feel.

[Mike Malone @mjmalone]

@BillBrasky69r @JohnFSilver @paulkrugman Ok, so let’s make bad investments illegal?

They had a $16b MTM loss in HTM assets… an unrealized 8% loss on $200b. They were just barely insolvent, which was being addressed.

I’ll repeat: 25% of deposits.

[Mike Malone @mjmalone]

@gammaflip @paulkrugman SVB’s investments are irrelevant. Next time it’ll be something else. Fact is, SVB was fine. Their losses were 8% of assets and they had financing. Without the bank run they’d still be here. The fact that a bad zoom call can kill a bank is a systemic problem. That’s what I meant.

[Mike Malone @mjmalone]

@josephruscio @WSJopinion Yikes.

[Mike Malone @mjmalone]

@gammaflip @paulkrugman 25% of deposits were withdrawn in a few hours. That number would have been higher if FDIC didn’t shut them down. Could other banks actually survive that?

Seems like a systemic failure & big risk for any bank with a large percentage of uninsured deposits.

[Mike Malone @mjmalone]

@aaomidi @paulkrugman They weren’t in imminent danger of failing though. We can hindsight some bad investments, but that seems kind of irrelevant.

25% of deposits withdrawn in a few hours. No bank survives that.

[Mike Malone @mjmalone]

@mitsuhiko @zeeg There are other banking regulations to manage risk. FDIC insurance is really about preventing runs. These tools work together.

[Mike Malone @mjmalone]

@mitsuhiko @zeeg If FDIC covered my company’s deposits I wouldn’t have withdrawn.

FDIC guarantees continuous liquidity & eliminates risk. And, in a scenario like this, FDIC could still liquidate and make itself whole. If there’s always a buyer, FDIC insurance is nearly free. Why not have it?

[Mike Malone @mjmalone]

@tshddx @zeeg Yes but in this case it was factual & public info. Saying “yo, that conference call SVB did was so bad I think people might panic and it could cause a run” seems like it isn’t & shouldn’t be illegal. Feels wrong, hard to enforce, and there are better ways to prevent a run.

[Mike Malone @mjmalone]

@john_matze @leahculver As a contrarian, it wasn’t.

[Mike Malone @mjmalone]

@zeeg It’s weird how good policy is never popular. Apparently FDIC insurance was super controversial when it was first introduced for these same reasons. People be people, and politics be politics.

[Mike Malone @mjmalone]

@zeeg And “SVB looks fine, but comms are bad so there might be a bank run” was 1) factual, 2) public information, and 3) not particularly catastrophist.

Like, that’s just how bank runs happen and why FDIC insurance exists, right?

Maybe there are more egregious facts I’m not privy to.

[Mike Malone @mjmalone]

@zeeg Bank runs are a known market failure mode. Seems unfair to expect ppl not to act in their best interest. Messages I saw were: SVB looks fine, but comms are so bad there might be a bank run. Real question: why is FDIC limit only $250k? Removing the limit would have prevented this.

[Mike Malone @mjmalone]

@nmasc_ @ArlanWasHere Saying “don’t panic” and “if everyone is telling each other that SVB is in trouble, that will be a challenge” when everyone was already panicking and saying SVB is in trouble was not a great message. Would have been better to have said nothing.

[Mike Malone @mjmalone]

@Fremean @caddyserver @smallsteplabs Registration issue, I think. Looking into it. Should be working again soon.

Probably DNS.