Tonight it's all Obama-corns and Biden-faeries but the market is already 'adjusting' to the new old new normal regime. Unfortunately in 'Obama II - This Time Its Different' the odds of going over the Fiscal Cliff just got real. As we noted here [3] (and in more detail here [4] and here [5]), there is now a 55% chance we go over the cliff (given the status quo of no compromise [6]) and the market is a long way from pricing that kind of GDP shock [7]...
[8]
As for what comes next, here's a hint: "Extended Alternative Fiscal Scenario [9]"
[10]