It was a remarkable day in the markets with one overriding theme: fear.

The morning opened up much weaker with bond spreads wider across the board, particularly in banks and financials.

There was a report from rating agency Moody's that it would downgrade dozens of banks in the upcoming future.

The Moody's headline, coupled with Greece unease, sent investors scrambling into the relative safety of Treasury bonds and out of riskier assets like financial bonds.

The Greece unease was fed by an online blog that detailed supposedly secret American-German coordination for a planned Greek default.

Greece's de facto default has been expected by the markets for a long time and only a very naïve person would assume that there was no trans-Atlantic coordination.

While the blog's claim of a sinister timeline is outlandish the market nevertheless seized and traded on the rumor.

But then another headline hit the tapes talking of a Greek bail-out settlement planned for Monday.

The market reacted by rapidly throwing in the towel with aggressive short covering of positions.

Monday is a market holiday in the U.S. and so players were clearly scared of remaining short heading into the long weekend.

The "student body stage left, student body stage right" trading action tells us that players are afraid of getting caught off-sides.

Players are afraid of being caught long with Europe deteriorating, yet they are also afraid of being caught short in case government intervention sends the markets soaring.

In macroeconomic news, initial jobless claims came out lower than expected and housing start numbers were better than expected.

Earnings for bailed-out automobile maker General Motors recorded the largest profit in the company's 103-year history, a success story no doubt for the upcoming Presidential election.

Momentum is in President Obama's favor.

The only serious potential hiccup down the horizon is the Iranian situation.

Oil is already trading at $102 a barrel and any disruptions in the Gulf of Basra would send oil prices skyrocketing, likely crippling the nascent global economic recovery.

In Washington, World Bank President Robert Zoellick announced that he would step down at the end of his term this June.

Secretary of State Hillary Clinton's name has been floated as a possible replacement, although Foggy Bottom has dismissed such speculation.

China's Vice President and princely heir Xi Jinping continues his Washington visit.

Ambassador Jon Huntsman had a very enlightening conversation on the topic of China with Charlie Rose; it is worth watching.