Making a Case for a Bear Market, pt. 1

Alright, so the market did some crazy things this last week, but it had a strong couple of days Wednesday and Thursday. However, I am not too sure we are out of the woods yet, so let's look at some reasons why.

China
The Chinese economy is in a transitional phase right now. They are moving from a manufacturing economy to an economy based on services and consumption. This should and will, cause a shake up in the world's economies. This means that all those things you used to get that said "Made in China," will no longer be made in China. So, what does that mean?
A manufacturing economy means that most people produce goods, while a consumption economy means most people sell goods. China became such a strong economy because they had cheap labor. In fact, they kept their labor cheap by controlling their currency. China is still a communist country, so they would control their currency in order to make their exports cheap, so people would keep using their labor to manufacture products then ship them to other countries.
Now that they are moving to an economy that models the US, their labor has gone up. Since labor has gone up, companies that have been using their labor are looking to move to other poorer countries, such as Cambodia or Laos. That way they can spend less per product, and generate more profit. Now, before companies have a chance to move, they need to pay for the more expensive labor, which will drive down profits, which should drive down stock prices.
The other problem with China, is that their economy is not doing too hot; they are spending less. This means that lots of companies that have made a lot of sales from China, are not going to have such strong numbers. This leads to less profits, and lower stock prices.
The reason for the slowing economy is probably most attributed to uncertainty. As the transition from a manufacturing based economy to a consumption based one, jobs and government action become uncertain. People can lose their jobs, or the government could do something that hurts the economy, so the people become savers, and spend less and less. As before, less spending means less profits and lower stock prices.

The Fed
The Fed is still not clear about when to raise rates, and some Fed officials are even saying we should begin easing again. I think that would be a terrible idea, but I also believe it to be highly unlikely. The problem is that the economy is running in emergency mode, at the moment. It is supposed to try and get the economy in the right direction, but I think it will eventually cause problems, especially if it is held out longer. Lower risk means bad investments, and if too many bad investments occur, eventually a bubble will pop.
However, if they turn off the emergency burners, they will cause some volatility in the market, because nobody knows what is really supposed to happen after rates lift off. At least they do not know what will happen in the stock/financial markets. This can all be a reason for a bear market. People may begin to sell with a rate hike and a slowing Chinese economy, and these two things will not be fixed in a quarter or two. I think we are looking at a bear that will last at least a year.