Your latest in business and finance for. You're watching live coverage of the opening bell on ABC news now bring about this morning the Harlem fine arts -- -- -- -- -- -- -- -- -- -- Yeah in New York... See More
Your latest in business and finance for. You're watching live coverage of the opening bell on ABC news now bring about this morning the Harlem fine arts -- -- -- -- -- -- -- -- -- -- Yeah in New York changes in the air this morning talk of a deal that would create the world's biggest airline what does it mean for both investors and travelers joining me now to discuss that and more is Mike -- senior columnist -- our partner the finance good morning -- Morning time so it looks American and US Airways are now trying to merge -- this has not been confirmed so. It what -- what happened here the biggest airline on the planet what does that mean for consumers. Well. Obviously it's a continuation of the consolidation that's been going on in the ailing industry for awhile if this deal goes through it really will mean. For very large US based airlines and that's all we'll have. So what it would mean is perhaps a trend toward a little bit firmer pricing which means that slightly higher prices are at least the possibility down the road that's been generally the pattern. When you have kind of larger competitors that are able to have what they call more pricing discipline. And that's been the case recently. It's not a no brainer -- that that happens because obviously it's still a very competitive area -- when the economy weakens at least even a little bit. These airlines rushed to make sure they have the traffic sort of basically what it means is a little bit more of the same but just was even larger. Companies competing now. Now American had previously resisted this idea of a merger what -- on their side. Well American's parent of course is in bankruptcy protection so this deal always seemed logical on paper. And in fact a lot of people on Wall Street assumed it was going to happen of one form or another it was a little bit of resistance based on you know the value that that American was going to get. In such a deal and also may be who was going to run it so I think it was a little more fighting over the details rather than fighting over the concept of merging these routes and making sure you have. A larger stronger competitor now can you walk past the benefits of the deal for each of the companies how would it's how would they -- Well essentially that the benefits are -- they don't have tremendous amount of overlap. In their routes so what it means is obviously you can kind of -- all kinds of money on the back and terms of purchasing enters a marketing terms of branding and then you can kind of have that much broader distribution. Meaning presence and many more airports lot more -- those airports that's really the value in an airline business is kind of that real estate at the airport. And this would for both companies essentially fill out the rest of of the country in parts of the world that they don't already half. But what about service to they have equal levels of service right now in terms of in flight meals at Santa. You know I don't I think that's exactly the kind of thing that's going to be need be kind of -- basically they're gonna come to some uniform standard of service I think -- flyers. I think -- probably expect. Is that it's not going to be revised terribly higher. I mean essentially I think that the industry is trained customers not to expect very much and that's exactly what -- -- That's very -- now isn't this is it possible letting new wave of discount carriers could emerge as a result of this. Eventually yes I do think that you know -- these cycles exactly go that way where you basically have the peace perceived opportunity out there right if you have the big guys you can only sell the the cheaper. Sort of more regional route. I think it'll happen I don't know if it'll happen in as dramatic way as we saw you know twenty and 25 years ago -- a whole new class a discounters which by the way you -- just cheaper in many respects we're kind of innovated in terms of how they delivered service such as. Island's -- and also you think about it at. JetBlue and they came out there are certainly Gary -- any a lot of these innovations have sort of normalize across the industry right now I think but -- -- time it seemed sort of a revolutionary new way of traveling. -- that's right so we could potentially expect little more -- down the right. -- -- -- -- -- -- -- -- -- -- -- -- -- An hour ago the label that Labor Department says 366000. People filed new claims that's down 5000 from the week before. When we say a big upsurge what is your take us you know. It's it's -- encouraging but in the same exact range we've been in for awhile now. We saw a blip higher for a couple of weeks in early January that was you know slight concern but it seems like it was quirks in the data at this point it seems like we're kind of settling back -- that range. Where it's a healthy but not particularly. Fast improving job market. Right now also out this morning report shows productivity fell at a rate of 2% in the fourth quarter that is the largest drop. In two years should be me worried about us. No not at all because really it's the flip side of people getting more jobs and getting paid more for them so when companies over the last several years -- tried to do everything they can to ring. Productivity out of their existing workforce and basically try to. You know substitute technology for people they're -- that someone at the end of that. Cycle they can't really do a lot more of that. What it means is you have to go hire a few more people you have to pay -- a little bit more so that's the trend that's the part of the cycle were hoping route right now. We've -- we've maximize corporate profits for a long time now. And now you have a little bit of give back. Lower productivity even though you don't want the trend to continue that direction where basically the economy becomes less profitable. -- what it really does mean is that workers are getting a little more of the share of the pie at least enough on of one quarter basis so far. About time right might help her heck yeah. Not a new wrinkle in a story we've been following for several days -- a growing number of states are now joining the federal lawsuit against S&P claiming it's a faulty -- led to the financial crisis what states. Hope to gain from this QC and financial gain for the states. -- money I mean that's that's the thing they hope to gain -- mean essentially. The -- the financial crisis the mortgage mess the foreclosure. Drama has cost states a tremendous amount of money both and lost revenue and then expenses based on the people losing jobs and unemployment insurance and all the other things the states have to cover. So I do think it's basically saying look if we can cast Standard and -- as a sort of central actor. In this -- and get them somehow legally liable for a lot of the damage then obviously they would be liable for financial. You know pay back. We're and that's what I think the whole thing is based on -- government says five billion dollars to targeting mess and people it's a huge number. Who knows if the company in its current form could even whether and award that size that's what's gonna be fought out. Absolutely now on a related note emails made public as a part of the lawsuit indicate that exactly does it JPMorgan knew they -- selling toxic mortgage backed securities. Couple list with what hasn't he is accused of doing was the entire system a fraud. I wouldn't say -- crisis it was a fraud I would say it's really just confirms what we already really -- happened. Which was a massively overheated housing market and financial industry that was essentially looking to just. You know make loans and sell them to other people by volume and not by quality that was what was going on at all times and all these emails really tell us is that. The institutions in the middle of it. We're aware of the obvious I mean honestly that's what it is so it's not as if you know every -- was a fraud or that houses every single house was and wasn't somebody -- fort. It means that the excesses were pervasive and now we have acknowledgment of also -- reason to believe things are safer for an -- Well what it -- safer for investors -- mean you know that the person who was applying for that loan that was they were not a good credit. You know if it's not safe for them because they're not -- able able to get along a -- a good thing for the overall system yes there's more capital the banks. Lending standards are higher therefore it's tougher to get loans and now home prices have settled down so it's not like there's a lot of hot air underneath those prices so. The environment is safer. But it's not necessarily because of anything that these companies have gone out and Don it's much more about you know the kind of corrective but the market and that regulators have put on the system. Certainly will be interesting to see the long term impact of this as a piece suit if there is an expert on the -- that agency and the other rating agencies as well aren't -- let's take one more look at the Dow -- relate -- how well it's down about 9 points this morning we'll see where we -- today. -- -- toll from Yahoo! finance thank you. -- I think been much.
This transcript has been automatically generated and may not be 100% accurate.