On days like today, a majority of my time is devoted to staying on top of alerts and analysis for MBS Live.  As such, this will be one of the few mid-day articles where I'll leave the analysis in bullet point format.  Hopefully there will be time to circle back around for more depth in the Recap.  Otherwise, you could always just join MBS Live where members saved so much money today on early, emphatic lock alerts to pay for several years of membership dues (Learn more or start a free trial).

Now down to business.  What the hell is going on with markets today?  

• If you take nothing else away from the following, take this: In general, today is about the switch being flipped whereby markets realize that Greece isn't at risk of exiting the Eurozone.
• Bond rallied overnight as Greek negotiations broke down.  This set the stage for a big snap back.
• Right at the European open, Greek FinMin Varoufakis was all over the wires saying uncharacteristically conciliatory things:
  • WILLING TO DO WHATEVER IT TAKES TO REACH AGREEMENT OVER THE NEXT FEW DAYS
  • SAYS REACHING A DEAL "IS THE ONLY OPTION WE HAVE, THIS IS PLAN A, THERE IS NO PLAN B"
  • GREECE PREPARED TO DISCUSS OTHER CONDITIONALITIES IF PARTNERS WILLING TO DISCUSS IT
  • SAYS HAS NO DOUBT THAT WITHIN THE NEXT 48 HOURS EUROPE WILL FIND PHRASING NECESSARY SO GREECE CAN PRESENT BAILOUT REQUEST EXTENSION
  • SAYS WE WILL MEET HALF-WAY WITHIN THE NEXT COUPLE OF DAYS
  • SAYS EUROPE WILL PULL A GOOD AGREEMENT OUT OF WHAT SEEMED AN IMPASSE
• This set the ball in motion for European bond markets.  German Bunds began a rampage toward higher yields.
• Later in the domestic session, separate reports hit saying the ECB would not quickly pull emergency lending assistance from Greece, and that Greece would request an extension to their loan agreement tomorrow.  Both caused immediate, noticeably spikes in bond yields
• Several other factors provided a fertile backdrop for the general weakness
  • Traders caught flat-footed after betting on lower rates following last week's ostensible support with 10yr yields just over 2% (many saw this as a buy signal).
  • Fed speculation regarding "hike-friendly" FOMC Minutes tomorrow, exacerbated by WSJ's Mester interview
  • General technical backdrop where bonds are broadly correcting from an overbought breakout to start 2015
  • Specific technical backdrop where bonds are getting "stopped out" (forced selling and/or snowball selling) as yields cross key technical levels at 2.04-2.08% 10yr.  Next support was 2.15 and was hit perfectly.
  • Stock lever...  Stocks are surging and the big upswings have correlated well with upswings in bond yields.

We'll talk more about the big-picture implications by and by.  Long story short though, what we've just seen has historically preceded completely opposite conclusions.  It could be a prelude to a bounce, or the first part of a much bigger sell-off.  Either way, February is the biggest snap back after a month of rallying since January 2009 obliterated Dec 2008's trend.