The U.S. economy is so bad that the chance of avoiding a double dip back into recession may actually be pretty good.

The sectors of the economy that traditionally drive it into recession are already so depressed it's difficult to see them getting a lot worse, said Ethan Harris, head of developed markets economics research at BofA Merrill Lynch Global Research in New York. Inventories are near record lows in proportion to sales, residential construction is less than half the level of the housing boom and vehicle sales are more than 40 percent below five years ago.

"It doesn't rule out a recession," Harris said. "It just makes it less likely than otherwise."

And some comments attributed to James Paulsen of Wells Capital Management:

The Standard & Poor's 500 Index might increase to about 1,300, while the yield on the 10-year Treasury note would rise toward 4 percent during the next six months or so if the U.S. steers clear of another decline, said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which manages $342 billion.

"We could have a really violent move," Paulsen said. "The markets have a lot of double dip priced in," he added. "I think the idea of that happening is pretty remote.

David Fuller's view I agree with James Paulsen - US 10-year Treasury yields (historic & weekly) will go back at least 4%. The only question is when? I think it will be sooner than most bond bulls currently believe.