A major bear market in 2016?

As stock prices have recently weakened, I have received some comments regarding the start of a bear market in 2016. To put it into context, bear markets start for one of three major fundamental reasons:

1. War or revolution leading to a permanent loss of capital (think Confederate war bonds, or German panzers smashing through French lines on their way to Paris in 1940);
2. An overly aggressive central bank tightening and tipping the economy into recession (you have got to be kidding me); or
3. An economic recession.

Since the first two points are highly unlikely to cause a bear market in the near future, I will focus on the likelihood of a recession. My framework of analysis is examine the economies of the three major trade blocs in the world, namely the US, Europe and Greater China.

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