QE..........
So, a 'prerequisite' for stronger equity markets is obvious: more QE(s)! Will the Fed oblige? Probably. The US central bank has already ruled out hiking rates until 2013. And it will probably do 'QE3' if the SPX drops further from here. The BoE is expanding QE by 75 billion pound. But, in my opinion, the next central bank to conduct a large-scale QE is not the Fed but the ECB. The European sovereign debt crisis demands it. Starting in 3Q this year, the ECB has started buying some Italian and Spanish government bonds. It is likely continue to do so - expand, even - until the crisis subsides.
View: Equity markets are currently under stress as investor confidence is sapped by debt problems, particularly in Europe. Eurozone needs a dose of QE to buy time for a wholesale restructuring of the political framework (such as fiscal union). The longer this QE is delayed, the more uncertainties it will bring.

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