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This from The James Joyce Table:

Cartel Capitulation Watch

This issue will increasingly grow in importance to the stock market as time goes on:

NEW YORK, Sept 24 (Reuters) - Stocks slumping for the third straight year will leave large portions of the pension funds of hundreds of top U.S. companies underfunded at the end of 2002, investment bank Merrill Lynch & Co. said.

These companies, which include General Motors Corp. and some other big names in the broad Standard & Poor's 500 index , will take a hit to their 2003 cash flow and earnings as they will be forced to contribute billions of dollars to their pension plans -- waylaid by the stock market's spectacular decline since 2000 -- to comply with U.S. laws that protect employee retirement funds.

Merrill Lynch estimates that the traditional pension funds, also known as defined benefit plans, for 98 percent of 346 S&P 500 companies are expected to be underfunded at the end of 2002. Those companies make up 70 percent of the S&P 500.

On aggregate, the pension funds of these 346 companies are expected to be underfunded by $640 billion -- or 69 percent of the total assets in their pension plans, according to a Merrill Lynch analyst's study.

Excluding post-retirement funds, pension funds are underfunded by $323 billion at the companies, a sharp drop from an overfunded position of $0.5 billion at the end of 2001, the investment bank said.

At the end of 2000, the reverse was true: The funds were overfunded by $215 billion.

So far this year, the S&P 500 has fallen 28 percent. It has tumbled about 46 percent from its all-time high reached in March 2000. Among the stock slide's biggest victims were pension funds, which typically invest a large portion of their cash in stocks.