Donald Trump & Joe Biden 1st Presidential Debate 2020 (Transcript)

Chris Wallace

Tuesday, September 29, 2020 |
9:00 – 10:30 pm EDT |
Case Western Reserve University

Moderator: Chris Wallace of FoxNews

Link: Transcript Frame Source

President Trump’s “Peaceful Transfer of Power” “Bluff”

Saddam Hussein Shotgun

Is Trump bluffing, like Saddam, to project an image of strength?



Press Conference: September 23, 2020

President Trump made news recently for declining to agree to a “peaceful transfer of power.

Mr. President, real quickly: Win, lose, or draw in this election, will you commit here, today, for a peaceful transferal of power after the election? And there has been rioting in Louisville. There’s been rioting in many cities across this country — red and — your so-called red and blue states. Will you commit to making sure that there is a peaceful transferal of power after the election?

THE PRESIDENT: Well, we’re going to have to see what happens. You know that. I’ve been complaining very strongly about the ballots. And the ballots are a disaster. And — and —

Q I understand that, but people are rioting. Do you commit to making sure that —

THE PRESIDENT: Oh, I know. I know. Yeah, no, we want —

Q — there’s a peaceful transferal of power?

THE PRESIDENT: We want to have — get rid of the ballots and you’ll have a very trans- — we’ll have a very peaceful — there won’t be a transfer, frankly; there’ll be a continuation.

The ballots are out of control. You know it. And you know who knows it better than —

Q No, sir. I don’t know that.

THE PRESIDENT: — anybody else? The Democrats know it better than anybody else.

Never Admit Weakness or Consider Defeat

The President’s sympathizers explain away his words by imagining a situation comparable to Saddam Hussein’s bluff with Weapons of Mass Destruction: Whereas Saddam Hussein could never admit he didn’t possess Weapons of Mass Destruction, out of need to project an image of strength, President Trump must never entertain the possibility of losing.

Here’s a description of UN Weapons Inspector Hans Blix’s assessment:

Blix provides a number of potential answers, ranging from Saddam’s pride, to the argument this essay advances—that he hoped to retain the threat of WMD in his weakened state. Only with the perception that he possessed unconventional weaponry could he be protected from his enemies such as Iranian Shi’a, Israel, and the Kurd

Bluffing led to disaster

We all know what disaster resulted from Saddam’s miscalculation and his need to maintain his pride..

What Motivates Trump:

In addition to his pride, Trump needs narcissist supply and the fears post-Presidency lawsuits. As a narcissist, he will provoke chaos without limit, seeing chaos as a bargaining chip in his bid to secure himself either:

  1. a continuation of Presidential term
  2. some post-presidential arrangement that avoids accountability and loss of face and  narcissistic supply.

Any post-presidency scenario that does not provide him with sufficient attention and a cushion to his ego will be seen by the President as unacceptable.

Like former Illinois Governor, Rod Blagojevich, the President is a transactional man who expects to get something in exchange for the power he’s been entrusted with.

Don’t “joke about bombs at the Airport” or bluff about WMD

Its a well know that one should not joke about bombs while you’re at the airport.  Likewise, you shouldn’t bluff about the peaceful transfer power in an election season.  The risk of this sort of brinkmanship is that it spirals beyond anyone’s control.

The Banana Republic Option: State Legislatures Overule

There is also a possibility that all this talk about fraud could provide cover for state legislatures to overrule the popular vote in their state, prompting Congress at a national level to cast votes on a 1 voter per state basis, which favors Republicans and would lead to a Trump second term.

Naked Quotations

FDR in 1933

As a history major and creator of a contextual citation system, I’ve come to the realization how many famous quotations are passed down without access to the surrounding context.

Quotes Divorced from their Context

He’s a quote from FDR that we do have the context for:  (click blue arrows)

the only thing we have to fear is fear itself

But go to any of the major quote websites and see how many quotes have been divorced from their original context.

For lack of a better term, I call these “naked quotations“.

These show up in journalism and on Wikipedia where we frequently have to settle for the citation of a naked quote.

Ted Nelson
Ted Nelson

Back to Ted Nelson’s Original Vision

As part of an effort to build the trust of our readers, I encourage authors to live to a higher standard by fully citing sources and providing their readers with context.

Ted Nelson’s original vision for hypertext kept quotes connected to their sources with two-way links.

My project is a rather hackish way of getting back what was lost with the web, towards Ted’s original vision.

US could have a digital currency in 12-18 months.

US Dollar - Bitcoin

A Digital Currency is Being Openly Discussed

I think many people underestimate how quickly a digital currency could become a reality in the US (and possibly Canada). Some of the following stories are a few months old but taken together, they present a strong case that a digital currency could become a reality much more quickly than people are aware of.

The Prediction: A Digital Dollar (Pontentially) in 12-18 months

Sheila Bair, former chairman of the U.S. Federal Deposit Insurance Corp

Transcript:  (June 26, 2020)

I’ve been a big big advocate of digital currency central bank-backed or issued digital currency that actually could be distributed directly to households in times of stress

Give them cash you know don’t give them more debt and find what technology will allow you today to have a transmission mechanism that goes directly into households and obviously congress needs to authorize that there need to be very tight controls around it

but nonetheless in a situation like that we’ve seen how the government and the IRS on the fiscal side has struggled to get EIP funds to households those payments notwithstanding some of the problems and transmitting the payments have done a lot of good for the economy

and so but having some type of automatic stabilizer where cash could actually be distributed through digital wallets which are fairly easy to set up right now right into households that would be so much more efficient than pumping all this money into financial markets and seeing this giant chasm right between you know what’s going on the stock and bond markets and what’s going on with main street

Sheila, the digital currency idea is super interesting because there’s a real concern that the US is behind especially compared with other countries notably china are you concerned about that race to create a digital currency

Well I am I think you know we are privileged to have the world’s global reserve currency I don’t see that changing anytime soon but I do think one of the undercurrents of what china is doing at least especially in developed countries that have unstable currencies is to uh default to the renminbi you know as the currency of choice that they’re using their own countries through their central bank’s digital currency

So yeah I think that’s exactly what’s going on I think we need to wake up to it we shouldn’t be too complacent about our leadership position I think you know or the strength of our system the strength of our fed and its independence and its integrity I think will always give us the edge but we need to effectively use this technology domestically I think it’s insurgently needed but we should also think about how the dollar is used throughout the world.

The other thing nice about digital currency if it’s cryptocurrency if it’s traded on a distributed ledger you have a much better audit trail of transactions so from a law enforcement perspective kind of there’s an urban legend that somehow it’s it makes uh illicit transactions easier actually makes it harder because with the central bank issued or back digital currency you can actually trace the transactions where that that digital money is going through the distributed ledger so from a law enforcement perspective it also has huge advantages

But we do need to be very aware of what’s going on in other countries and the real risk of that is posed to us if we don’t effectively

leverage what you know what is is happening now I mean

I think between in 12 and 18 months we could probably have a system of digital currency if people really put their mind to it and again it needs to be authorized by congress uh but the fed I know has been looking at it for a while and I think we need to accelerate that.

How will the US roll out a Digital Dollar?

(Tim’s speculative prediction)

  • Suppose a future stimulus check is rolled out. Instead of receiving a check for $1,200, you will be told to log into a new account at the federal reserve to claim your stimulus money, which can be connected to an app on your phone.
  • Unlike traditional bank accounts, the fed could say that the fed account has an interest rate of negative 4 percent. The longer you keep it in the bank, the more it depreciates.
  • This gives you an incentive to spend the money to stimulate the economy.

Refunds on Failing Banks:

From their stock prices, it appears that investors are not optimistic about the prospects of many small and regional banks. Warren Buffett’s company sold stakes in Bank of America, Goldman Sachs, and Wells Fargo. Simultaneously, Warren Buffet, or likely someone who works for him, paid $500 million for a stake in Barak Gold Mining.

If the small and regional banks start to fail, will the Federal Reserve follow the same bailout approach as 2008?

No Cash Refunds:

No Cash Refunds
No Cash Refunds

If you purchase a ticket to a business like Hershey Park and later, for some reason, ask for a refund, the Amusement Park will likely not give you cash.

Most likely, they will give you a coupon to visit one of the company’s businesses at a later date.

This same “no cash refunds” policy will likely apply to FDIC insured banks.
Unlike 2008, the Federal Reserve will not try to save many of the smaller and regional banks. Rather, the FDIC will likely direct depositors’ refunds to new accounts at the Fed that use new digital dollars.

Programmable Money:

The fact that digital currency can be made programmable has both advantages and disadvantages.  The government could give people in one part of the country a different interest rate in response to local conditions.  They could also give different interest rates to individuals. They might also be able to incentivize (or disincentivize) purchases in certain sectors by designating particular stimulus dollars to be spent for qualifying purchase types.

Digital dollars would likely also be programmable in and of themselves, allowing for instant tax payments at the point of sale. Tax refunds and rebates could be instant, too.

And attempts to purchase a restricted item — like, say, a firearm without proper background clearance — could be automatically denied.

In many ways, programmable digital money would be a fantasy come true for economists. This is because economists believe economies are driven by human behavior, and human behavior is driven by incentives, and all kinds of incentives could be built into digital money.

Imagine, for example, a maximum limit on the loan-to-value (LTV) ratio of home mortgages, designed to prevent future housing bubbles.

If such limits were programmed into the digital currency, as a form of “smart contract,” the transaction would not go through for a loan amount deemed too large.

Economists, political leaders, and central bank officials could then use the “smart contract” feature of digital dollars to tweak or massage incentives in all sorts of ways.

For example, fossil fuel use might be embedded with a higher VAT (value-added tax) surcharge than green energy use. Buying sugary cereal might create a small debit, whereas buying broccoli creates a small credit. And so on.

In addition to the above, all transactions would be instantly available for review, or easily aggregated into “big data” analysis patterns. This would give the Federal Reserve unprecedented new levels of visibility into the current state of the economy.

Why go digital?

The US is afraid that China already has the lead with its digital currency. The Chinese digital currency is already in the pilot phase, with the goal to roll it out before the 2022 Winter Olympics in Beijing. The US wants to maintain its relevance and status as the reserve currency.

A digital dollar:

  • helps the fed fight deflation by allowing the Fed to reduce the usage of cash, and thereby enact negative interest rates for money that is in the bank.
  • gives the government additional surveillance power over its citizens,
    • the government can already find out a lot about your finances, but a digital dollar would give them access to every transaction in realtime.
  • allows the US Financial System (pricing of commodity contracts, etc) to maintain its supremacy
  • allows the US to protect its status as the world’s reserve currency, which
    • gives the US the ability to borrow money at lower rates than other countries
    • gives the US the ability to use the financial system to punish its rivals (like Iran, China, Russia, etc)
  • is potentially more inclusive of those who currently lack a bank account and couple reduces the costs of cashing checks, overdraft charges.
  • increased cost-saving through efficiency.
  • transfers would be faster, happening immediately instead of taking days to clear.

Articles describing the Digital Dollar.

Senator Tom Cotton
  1. In the Senate Banking Committee, Senator Tom Cotton said:
    • “The U.S. needs a digital dollar…The U.S. dollar has to keep earning that place in the global payments system. (video: 1 hr 08 min)
  2. In June, Sheila Bair, former head of the FDIC said the US could have a digital currency system within 12 – 18 months.
  3. VISA says that they aim to become the preferred network for Digital Currency wallets.
VISA Digital Currency
VISA Digital Currency









(Read More Articles)

  • What is debatable:
    • whether the technological capabilities are accurately represented
    • what powers the government should, or will want to claim
    • what the public’s political reception will be, especially for the programmable digital currency elements
    • whether some of the potential excesses will be held in check at first, but whether the bigger power grabs come later once the technology has become ubiquitous.

Questions for Discussion:

If the US adopts a digital currency, how will this affect decentralized cryptocurrencies like Bitcoin? Will digital currencies with capped-money supplies like Bitcoin increase in value because they provide a freer alternative to digital dollars or will governments outlaw them and suppress their use?

What should we do?

Assuming a digital currency is likely to happen in the next year or two, is there anything that citizens should do in anticipation or response?

Investment Portfolios: Diversification Strategies

(filmed Feb 7, 2020)

Summary of Counter-correlation Strategies:

Chris Cole of Artimis Capital (the person being interviewed)  argues that most investors and pension funds are historically illiterate and use portfolios based on models of the last 40-years of market data, rather than longer-term market conditions going back to the 1920s.

Investment Eras:

  • Secular Decline (1929-1946)
  • Secular Rebirth (1947-1963)
  • Secular Stagnation (1964-1983)
  • Secular Boom (1984-2007)

Most people would be surprised to learn that most of the stock market growth of a 60/40 fund in the last 90 years occurred in the 1983-2007 era of Secular Boom.

90% of the returns of a 60-40 stock-bond portfolio came from the 22 years between ’84 and 2007.
Just 22 years drove 90% of the gains of that portfolio over 90 years.

The Limits of “Traditional” Portfolios:

Cole argues that approaches we think of as “traditional” have done well in the recent Secular Boom, but would not have done as well in other market environments:

  • 60/40 stock/bond fund: bonds don’t counterbalance a portfolio as well under zero interest rates.
  • “buy the dip”: would have gone bankrupt 3 times in the past 90 years

Proposals for Other Market Conditions.

In bear-markets, one doesn’t know whether to expect inflation or deflation, so Cole advises that investors carry exposure to each possibility.

Although Cole is selling a proprietary asset class he calls “Long Volatility” (beware of how Cole is making his money), one does not to purchase his services to learn from his thesis.

Three of the 4 asset classes can be purchased through generic mutual funds or ETFs:

  1. TIPS (Treasury Inflation protected securities)
  2. Commodities – bought through an ETF
  3. Gold –  bought through an ETF or other arrangement
  4. Long Volatility – (available to sophisticated investors) ** disregard

What is your attitude to these first three asset types as a complement to traditional stocks and bonds?

An asset class doesn’t have to generate a long-term appreciation to be beneficial if it is negatively or less-correlated with other assets.  In fact, the example Cole uses actually loses money overall individually but is beneficial in counter-balancing the portfolio.

  1. TIPS have some upside under inflation but do not risk the same losses as stocks.
  2. Commodities Index: have the potential to hedge against inflation of commodities covered by the index
  3. Gold: My Dad doesn’t see any place for Gold other than jewelry.  I note that gold is (historically) less correlated with stocks and could reduce the overall volatility of a portfolio.
    • Faith in the stability of the fiat US Dollar: It was only in 1971 (7 years before I was born) that the US went off the gold standard and if you look worldwide support for gold as a monetary hedge is greater in places that have had the most government malfeasance and economic turmoil. From what I’ve heard, disdain for gold as a financial hedge is only common in places like Western Europe, the US, and Canada, which have had better governance (historically).  The quality of US governance is shows signs of deterioration, making confidence in the government’s fiscal restraint less certain.


In Cole’s paper — The Allegory of the Hawk and Serpent — he describes the different investment eras since the 1929 stock market crash:

Investment returns were heavily influenced by what era the investor was in:

Beginning in the early 1980s, a self-reinforcing serpent of favorable demographics (the baby boomers) and declining interest rates (falling from 19% in 1981 to nearly 0% today) drove asset prices higher and higher.

Baby boomers saving for retirement meant more money flowed into stocks, bonds, and real estate, driving up prices. At the same time, interest rates were decreasing, causing individuals and companies to take on more debt, some of which were used to buy those same assets, further increasing prices.

Today, the situation looks quite different. The first wave of boomers began retiring in 2017. Over the next decade, more boomers will sell their serpent assets (stocks, bonds and real estate) to fund their retirement. On the interest rate side, it’s anyone’s guess where rates will go from here. We do know that they are at historic lows already.

Growth Assets:

Serpent assets include those assets which perform well in periods of growth such as

  1. stocks,
  2. bonds and
  3. real estate.

As these periods go on, they can become corrupted by greed as either fiat devaluation and/or debt expansion replace fundamentals. If left unchecked, this is ouroboros, where the serpent of growth eventually devours its own tail.

Stagnation/Depression Assets:

Hawk assets are those which do well in periods of decline or stagnation:

  1. gold,
  2. long volatility/tail risk, and  (Chris Cole is selling a strategy for this to more sophisticated investors)
  3. commodity trend following.

Diversified Portfolios:

A number of portfolios attempt to implement diversity between assets in a way that can better weather a variety of market conditions:

1.  All-Weather (Ray Dalio: founder of Bridgewater hedge fund)

2. Golden Butterfly

3. Paul Merriman’s Vanguard

Fund Symbol Aggressive Moderate Conservative
Vanguard 500 Index Admiral Shares VFIAX 11% 6% 4%
Vanguard Value Index Admiral Shares VVIAX 11% 7% 5%
Vanguard Tax-Managed Small-Cap Admiral Shares VTMSX 11% 7% 4%
Vanguard Small-Cap Value Index Admiral Share VSIAX 12% 7% 5%
Vanguard Real Estate Index Admiral VGSLX 5% 3% 2%
Vanguard Developed Markets Index Admiral Shares VTMGX 9% 6% 3%
Vanguard International Value VTRIX 18% 10% 7%
Vanguard FTSE All-World ex-US Small-Cap Index Admiral VFSAX 9% 5% 4%
Vanguard Emerging Mkts Stock Index Admiral Shares VEMAX 9% 6% 4%
Vanguard Global Ex-US Real Estate Index Admiral Shares VGRLX 5% 3% 2%
Short-Term Government Bond Index Admiral Shares VSBSX 0% 12% 18%
Intermediate-Term Government Bond Index Admiral Shares VSIGX 0% 20% 30%
Short-Term Inflation-Protected Securities Index Admiral Shares VTAPX 0% 8% 12%


4. The Dragon Portfolio   (Chris Cole’s Sample portfolio)

According to Artemis’s research, the optimal portfolio from 1929 to 2019 was:

  • Domestic Equity (24%)
  • Fixed Income/Bonds (18%)
  • Active Long Volatility (21%)  (Chris Cole’s paid fund)
  • Commodity Trend Following (18%)
  • Physical Gold (19%).

The “Dragon” shares the commodity and gold asset classes and adds a “volatility” asset class.

Active Long Volatility: Sophisticated Investors

Implementing the “Active Long Volatility” is more difficult than other asset classes and likely is only possible for sophisticated high-net-worth investors.

Vanguard Dragon Proposal

There is a conversation on the (Vanguard) Bobble Heads forum the proposes the following instead:

Market-Timing & Portfolio Reallocation

Buying into the type of counter-cyclical assets may risk buying at market highs.
Commodities do not appear to at quite the same highs as Gold.


What will Democrats have to pay Trump to leave?

Rod Blagojevich
Rod Blagojevich

How do Transactional People Think?

After Barack Obama was elected President, Illinois Governor Rod Blagojevich had the power to appoint Obama’s successor to the senate.

Being a “transactional” sort of guy, Governor Blagojevich, wanted to use what he had to maximize his own interests.

I got this thing and it’s  f****  “golden”:

FBI agents recorded  Blagojevich conversing with an adviser:

I’ve got this thing and it’s fucking golden and I’m just not giving it up for fucking nothing

Blagojevich was seeking:

  • a salary for himself and ($250,000-$300,000)
  • a position on a corporate board for his wife (~$150,000/year)
  • campaign funds, with cash upfront
  • a cabinet post or ambassadorship

Pardoned by Trump:

After he was impeached by the Illinois Senate, he was indicted and convicted in Federal Court and sentenced to 14 years in prison.

Blagojevich was unrepentant and protested his innocence, serving 8 of those 14 years, before being pardoned by President Trump.

What will Trump want in exchange for him leaving office?

Now it is still possible for Trump to fairly win the upcoming election.  But if he doesn’t win legitimately, will he go quietly?

I assume that Trump does not intend to give up the Presidency for “nothing” if he loses and that a lot of the choices he makes are about strengthening his hand and developing a narrative.

How much will Democrats be willing to pay, in money and otherwise, to have Trump leave office?  And what will be Trump’s ask?  Here’s my guess:

Mount Rushmore
Mount Rushmore

What will Trump ask?

  • Legal absolution: scuttle all the sealed indictments and future court cases against him.
  • Stop damaging disclosures: If not already public, silence unfriendly attention regarding tax returns, etc.
  • Financial Bailout/fleecing   His hotels and golf properties haven’t done well financially lately.   I don’t know the state of his financial need, but he seems to take pride in finding creative ways to fleece the taxpayer.  Expect financial demands.
  • Honor: recognition of his status as a great President.  Maybe a monument, naming rights to a building, etc.
  • Attention: Trump would likely want to host his own show or own his own network.  He needs to see a future for himself after the presidency.
  • Nepotism: Donald wants his family name to remain relevant so he may want some benefit, particularly for Ivanka, his favorite child.
  • Victimhood: Trump will need an excuse for why he didn’t get a second term both for himself and his supporters.  If defeated, like Blagojevich, he can not admit it.  The only way he will agree to relinquish power is under the condition that he can still insist that he was a victim and the election was rigged.

What will Trump Threaten?

The basic idea to keep in mind is that Trump is less concerned about the peaceful transfer of power than the Democrats are.  Trump has an affinity for chaos and that he will use that as leverage.

What do you think?

Everyone expects that Joe Biden will concede if he loses.

But if Trump loses but not in a big way, will he readily accept defeat?

If not, what will Trump ask and what will he threaten?


P.S.  Why is it that this sort of politician seems to have a thing for having a full head of hair?

Why Did Corporations “Waste their Capital”?

Hi Roger,
I’ve got a basic question about how the post-2008 “economic fragility” you mention in your May 13 briefing relates to the “wasted” leveraged buybacks Raoul Pal talks about in the May 15th briefing:
Was the consumer too weak to support robust growth post-2008 and is that why corporations “wasted” their capital by buying back shares with borrowed money?
(21:06) RAOUL PAL: So I’ve talked about this in the doom loop on Real Vision before as part of a whole thesis of mine, which is based around the maximum amounts of corporate debt in US histories now. That debt was driven by corporations basically wasting their own capital to buy back their shares, without putting it to more effective use and efficient and productive use. 
What accounts for the use of buybacks rather than productive investments?
Why didn’t corporations use their capital for productive purposes?
(My suspicion is that consumers were too maxed out to afford substantially more consumption, so why invest in increased capacity?)
Here’s what you said about two days earlier about “economic fragility”:
ROGER HIRST: … That’s going to be what’s happening, and so it becomes all about balance sheets. It’s corporate balance sheets, it’s household balance sheets and it’s government balance sheets. Have they been impaired?07:16
I think the key to all of this is that there was the underlying fragility of the global economy prior to this. This was not a strong economy, and I’m not just talking about the last year where we saw some numbers deteriorate. I’m talking about the world post-crisis 2008 where there’s never proper recovery. We had anemic growth. We had the illusion of health because the equity market in particular and in particular in the US, rose to these astonishing heights, but overall, a lot of people, median wages took a long time– real median wages in the US took a long time to get back to the 2007 levels. I think it was ’15, ’16– 2015 and ‘16.07:52
The man on the street, the woman on the street didn’t see a pickup in wages for a long time. A lot of people are living paycheck to paycheck, 46% of Americans have less than $1000 of cash in their savings account.

Did corporations think that their consumers were too maxed out to generate further growth in 2009 – 2020?
In other words, did they view their customer’s balance sheets and income growth potential so dimly post-2008 that they decided productive investments in additional capacity, etc were too risky and that it would be safer to take advantage of low-interest rates to use debt to buy back their own stock?
I understand interest rates were low and executives were looking to meet their bonus targets, but why did that entail so many share buybacks rather than productive investments?
I figure the pros may already understand that this has taken place, but as a “citizen investor” I’d appreciate hearing this spelled out more explicitly.
If corporations were reluctant to invest before, what does that say going forward?