Now this is what I’m talking about. I’ve been warning clients for weeks to expect extreme volatility while policymakers, all playing to their respective supporters, wrestle their way to the edge of the “fiscal cliff”. Of course that wrestling match was to be between Democrats and Republicans, not Republicans and Republicans.

Boehner’s “Plan B” apparently doesn’t pass the sniff-test for the tea-party contingent. The vote planned for this evening was scrapped for lack of support. And stock futures traders responded as you’d expect—as I type Dow futures are off around 200 points. Congress now goes home for Christmas. They’ll be straggling back to “work” on the 26th.

As I suggested in yesterday’s audio commentary, don’t be surprised if January 1 comes and goes without a deal. Do be surprised if January 1 doesn’t get revisited retroactively with the conditions of whatever compromise they conjure up in the early days of 2013.

Bottom line, this was to be expected all along. The fact that it’s coming this late in the game may mean that what should have been several weeks of volatility gets concentrated over the course of the next few. Underperforming hedge fund and mutual fund managers (and there’s a ton of them this year) have got be salivating—as they may get that buying opportunity after all. Of course they’re playing a most precarious game. A deal, when you least expect it—particularly following a market decline—can wipe out a buying opportunity in a hurry. Good thing you and I are long-term investor-types and never get rattled by short-term volatility, right?

Stay tuned, or, safer-yet, tune out…