I've written a lot on this, and used to be a bond bear (for inflationary reasons mostly. $95 crude, 6%+ real inflation and 4% yields long duration don't quite jive)... i'm now converted. If the prognosis for the economy is lousy, I think long duration yields will gravitate towards a flattening curve in relation to the short duration (which means 30-40% upside against a short). And thats right, commodities will likely take a hit as demand slows and y/y inflation numbers will turn *negative*.
Only in hindsight will 4.0%+ yields on long term maturities seem crazy considering the condition. Thats your bull case.
bondo got smoked after TAF auction now bid strong you can not hold positions in these markets unless you can take a lot of heat, earnings and rumors cause crazy movements