What happens after the Santa Claus rally?

This market has a deja vu feeling to it. This time last year, it was faced with the prospect of Eurogeddon. This year, it's the fiscal cliff. Regular readers know that I believe that we will likely see a Santa Claus rally (see Risk on! and Waiting for a Santa Claus rally). The most likely scenario is a relief rally based on a benign resolution of the much overhyped fiscal cliff. As I look forward into 2013, the more pressing issue becomes one of what happens after the relief rally? An earnings cliff? The biggest risk to US equities is what Barry Ritholz termed an "earnings cliff", which he wrote about in late October. He was seeing signs of stalling earnings growth from large cap multi-nationals (listen to this interview with him). Peter Gibson of CIBC explained Ritholz's "earnings cliff" thesis in a more coherent manner. Gibson monitors ROEs and how their components change...