Rate Cuts Create a Doom Feedback Loop. Mannarino
Source: Gregory Mannarino | Date: January 25, 2026
Key Takeaways
- Major US banks fell 6% in aggregate this month following Q4 2025 earnings, driven by high valuations, weak mortgage lending, and rising defaults
- Rate cuts create a "doom feedback loop" by debasing currency and inflating debt while signaling the system needs more support
- The feedback loop consists of: debt hyperbubble forcing policy response → currency pressure → deposits moving out of system faster
- Rate cuts don't just squeeze bank margins - they require more debt issuance, intervention, and currency devaluation
- Mannarino emphasizes everything operates on "cause and effect" principles in market analysis
Market Views
- Banking sector showing significant weakness with 6% aggregate decline
- Rate cuts signal systemic problems requiring ongoing intervention
- Expectation of continued currency devaluation and increased debt issuance
Assets Discussed
- Major US Banks: 6% aggregate decline following Q4 earnings due to high valuations, weak mortgage lending, rising defaults
- US Dollar/Currency: Expected continued debasement from rate cut policies
Notable Quotes
- "Rate cuts don't just squeeze bank margins... But rate cuts debase the currency and inflate debt"
- "Everything's cause and effect for that matter. You turn left when you should have turned right, you'll have a cause and effect"
Related Charts
Auto-generated summary.