It had seemed that many participants were looking past the US fiscal cliff and were to be content taking on more risk. However, yesterday's late developments have provided a cold slap of reality. Our base scenario, under which the US does in fact go over the cliff appears more likely now that Speak Boehner's "Plan B" failed to draw sufficient Republican support to allow a vote. Indeed, there is some speculation that the failure of Boehner's gambit may see a leadership challenge right after the New Year. The lack of a coherent Republican strategy has prompted a large unwind of risk-on and thin holiday market conditions ... (full story)