High. Yes, down 20 otherwise. Now when oil goes lower, airlines tend to go higher in terms of the stocks as those stocks rallies today. Can you see that each of them most of them up over 2 . We have the number one analyst Airline Analyst on the street with us to day. Jamie baker. Hell give us his top airline picks. And president obama just announcing new Clean Power Plan which could have a major impact on the coal industry and basically industry at large. Weve got the ceo of American Electric power live. And the cit group is completing the purchase of one best banks parent company, cit ceo john than will be joining us to discuss that deal and the impact it could have on the lending environment. That will be a cnbc exclusive in a few minutes. In the meantime lets talk about todays Market Action joining our closing bell exchange, we have chase chief economist anthony chance us with. We have president of onpar executions and our own Rick Santelli joining us as well. Peter, the impact that oil is having on stocks today, describe that. I mean i guess its just the Energy Stocks justin to suffer. We talked about how cheap theyve been. Oil just keeps going lower. Oil keeps going lower. And what it does is it forces the drafting of other stocks to follow. I think when people start getting out of certain positions, it tends to lead to getting out of other positions. I think were seeing some of that now. You know you have to look at the Positive Side to this though. These stocks are getting cheaper and cheaper. You know that i am ready and willing to pounce. Im ready to pounce and getting very close the i think theres a lot of good value out there. Its long term. Its not sixmonth picture. Its a year, two years, three years. But its a there are some very, very enticing opportunities. On that point, bill a lot of people are saying wait a minute. At what point does this become a positive impact for the u. S. Economy . I think youll see that in auto sales. Gasoline prices are down close to 1 from last years levels. And remember that onest reasons why oil prices are down is because of the weak pmi numbers we got out of china. We should not lose sight of the fact that the people of china are watching the numbers and getting ready to act. Rick its not just energy. I mean were seeing a defensive play in the treasuries as well. Youre at two month lows or had been earlier today for many of the maturities along the yield curve today, right . Yeah. Its funny. As i look at the twos threes fives, sevens all of them are higher in price and lower in yield than they finished last year except for one and that is the 30year bond. I think investors will pay particularly close attention when we get to that level which is 275. So were about 10 11 basis points away. In terms of energy you know there are other ways to look at this. The economy isnt only defined about it price of an exxonmobil. I still contend that true economy will be better off for all the gas stations on every corner having price wars. I think its also very encouraging that its one of the few industries before they get done tinkering with it where its supply and demand still rules the roost. If they want to add in more supply, let the demand fall where it may. The economy is calibrated by energy and not just in the cards we drive but we use energy for everything. I think ultimately these price wars bringing down may not be good for investors. Theres a world of citizens outside the investors that do make up the economy. Do we get any hints in todays manufacturing report that this is translating into a boost of this drop in energy and input prices . I think if you dig down deep in the report you see some signs of improvement and, of course youve gotten other prfrpurchasing managers that are more optimistic. I think moving forward, rick is right. The Lower Energy Prices will have an impact. Consumers are going to get a big wind fall because of the Lower Energy Prices. So are businesses. Even though energy and earnings are very low we know that more than 90 of s p 500 are not Energy Related and they actually benefit from the Lower Energy Prices. You know we talked often about the red flags that are showing up these days. Fewer and fewer stock hitting new highs as the market was going higher. Now were getting a report that Short Interest is at the highest level in quite a while, right . That should Say Something. I know its feeding into your argument. Youre still out of the market right now. About you what the do you suspect is coming here . You know i think that what we should expect i think there will be a little butt of a selloff. Its not based on oil. Its based on funneled. Damentals. I dont think it was the greatest Earnings Period weve had any long time. As feared. It was okay. I think without that and with the upcoming fed rate hikes, you know, youre going to see a little bit of a selloff. I think that will help investors at some point get back into the market and it will be an opportunity for some good profits. We have to go to the price action today. Were down 163 points now on the dow. What levels are you watching to see if this selloff intensifies . For me this market would have to go down another 75 to 100 points today. I dont see that happening. Now leading commercial lending and leasing provider cit group completing the acquisition of one west bank today. Joining us in an exclusive is john thain, chairman and ceo of cit group. Welcome you to john. Nice to be here. What does this deal represent for the Banking Industry . There is the first deal where we created a new cifi. There should be more consolidation in the Banking Industry and particularly for institution thats are below 100 billion, i think this is a good sign. You know it the talk is that you and bbnt down in North Carolina are with all the acquisitions that theyve been making and wanting to make recently that floodgates are going to start opening up for regional banks to continue this merger maenaa. Do you agree with that . If you think of the compliance cost thats banks have to endure it makes sense for the institutions under 100 billion to combine. John thinking back on your career and wonder what reflections you may offer as we move through the post crisis period into a world of still incredibly low interest rates, a slightly weak economy and what you see as the most vibrant piece of this industry. We lend into the middle market space. That space hasnt recovered yet. We havent seen the activity this we would have liked. We do see Good Business in our rail car business. Our rail cars are 98 leased. That leads to me to be optimistic about the economy. You know this merger as you know, takes you above that 50 billion market cap mark that regulators identified as a, you know, an important componentst economy right now s that a level to be feared from a regulatory standpoint . Will it change the way you do business . Should that level be raised as the economy improves . What do you think, john . The 50 billion is designated a systemically important financial institution. Were the first ones to go over that. In term of a risk point of view do we represent a risk to the Financial System . The answer is absolutely not. And there is already talk about raising that 50 billion limit to some number 100 or higher. I frankly think they should do that. How much is the cost for you guys increase by being a systemically important financial institution, john . Well we are already at 46 billion of assets. So weve been planning to go over 50 for some time now. The expectation is we would have had to comply with the rules and all of that implies. But it is an expensive process. You could put a rough number on it for us . You know i really cant because a lot of the systems that we put in place so the compliance systems, the bsaml systems swreshgs systems, we would have had to have done that. Its not a specific number. Its part of the overall integration of our systems. Kelly is mentioning your varied career. We know about your time at Merrill Lynch and you were the one that brought Merrill Lynch to bank of america, put them together during the financial crisis. You know im not asking you to second guess Brian Moynihan by any means. But there is talk out there that maybe the two divisions are just not get ago long. B of a and Merrill Lynch s that a business mod that will is still valid today . Do you think merrill will be worth more if it were to be spun off and a stand alone company once again . What do you think about all that right now . I sold Merrill Lynch to bank of america because i had no choice. Ly to protect the Merrill Lynch employees and shareholders pt we did that. And so thats my point. Now its a very different time though. Thats true. I think the wholesale bank thats do everything offer every product to every, i dont think its clear that there are synergies that people expected are really there. So what does that mean now . Should they go their separate ways . The pieces have been integrated. The Investment Banking pieces i dont think its viable for them to split it off at this point. All right. Fair enough. We know these things are hugely costly in both directions. You ran this place for a time and deal with Market Structure now. What regrets if any or what might you have done differently down here now that weve seen the fragmentation of u. S. Equity markets . I think its a negative that markets have been so frag mfragmented. That is really the sec and the rules they have in place that require the marketplaces to trade in so many different places. That is really because of the sec rules. You are worried about liquidity, speaking of the Market Structure right now . With dodd frank rules prohibiting banks to trade for their own account . There is fears that there will be a liquidity problem when the fed does start raising interest rates. I mean you got your finger on that pulse. What do you think is going on out there right now . I think theyre expecting to raise rates. So far there is plenty of liquidity in the marketplace. I think that those who continue to make markets have great opportunities. Speaking of john you know just this deal youre sealing today, your come back of sorts in this industry. How big do you plan to take this bank . You are going to keep in mind some of these tlesh holds that are thresholds out out by regulators or is the sky the limit . No. Were right now about 65 billion post the deal. I think well grow at a kind of a 5 to 10 rate a year. I think well stay substantially under 100 billion. And this size is a good size for a regional bank. All right. John, appreciate your time this afternoon. Thank you, john. All right. Thank you both. Bill theyre shares have not changed much between when the deal was announced and today completed. It was a cash and stock deal. They had that occur enstoi use. We have 45 minutes to go in the session. We have a dow down about 164 points with real weakness in the energy space and oil under pressure here. Coming up you saw it live here on cnbc the president s speech on the new carbon limits. Will it leave the coal industry in the dust . Well get answers just ahead. Well talk to the ceo of American Electric power and get the view from the industry on the president s new clean air plans coming up. And Airline Stocks are moving up. Crude Oil Continues to drop. A top Airline Analyst names his picks ripe for even more gains. Thats next. Stay with us. Why pause a spontaneous moment to take a pill . Or stop to find a bathroom . 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Pg e is using new technology to improve our system, replacing pipelines throughout the city of san jose, to provide safe and reliable services. Raising a family here in the city of san jose has been a wonderful experience. My oldest son now works for pg e. When i do get a chance, an opportunity to work with him its always a pleasure. I love my job and i care about the work i do. I know how hard our crews work for our customers. I want them to know that they do have a safe and reliable system. Together, were building a better california. The s p 500 is down 14. The nasdaq is down 31. You can see the dow there is the one getting hit the hardest. You can blame oil for much of that. Wti crude at the 45 range now down another 3 3 4. And brent is below 50 for the First Time Since january. These are lows we havent seen yet this year. Analysts blame sluggish data on u. S. Consumer spending and china and manufacturing. We all know the reasons. Yes, we keep pumping. So supply and demand is whats going on. It keeps happening as oil hits a low. Airline stocks are getting a bid. For more on what we may expect from the airlines were joined by jamie baker. He is senior Airline Analyst at j. P. Morgan. Welcome becomeack. Thank you. Is it as simple that lower oil costs and airlines will benefit and you should buy the stocks . In a word yes. I dont think the entire investment thesis is predicated on cheap fuel. It comes on top of the benefits that weve already acrude consolidation, better management, the chap 11 car wash that so Many Airlines went through. But lower fuel is good for Airline Earnings and also good for shareholders because a lot of the cash is put back on dividends and buy backs. The gains are not evenly distributed. What is the difference between airlines which tend to hedge fuel and those which dont which would capture more of the immediate benefit . Top rated American Airlines stands out. They dont have any fuel hedging at the moment. I dont think they ever change that policy. Having said that delta, you know, in southwest have both materially overhauled their hedge books. So they are increasingly benefiting as well. But american, the math is very easy. No hedges whatsoever. But what about their business otherwise . You know, there is that movement by the government to inspect whether or not they have been managing their supply, so to speak, and maintaining certain levels so that the cost of seats will continue to go higher. Do you think thats a part of this going on right now . Well i absolutely think that, you know keeping capacity tight and working on pricing what is airlines are doing. What the government is looking into is whether they broke any laws in coordinating this type of behavior. You know, we doubt there is any smoking gun that miff the managements acted improperly. Id say its a mixed bag out there. There are pockets of pricing weakness across the United States. Obviously demand to and from brazil is very very weak right now. But when you take that in conjunction with current fuel prices the industry is generating margins that i never thought i would witness. Its fascinating to look at the Airline Index and how it trended lower, including sharply over the last couple months. What is it about this industry . Is it the participants investors needing to you know leave profitable trades or something larger speaking to Global Demand . Why have they been struggling so much . Are we on the cusp finally of a turn around . Sure. I cant see the chart that you have up. But presumably youre looking at black wednesday, the events of may 20th. And that was a date which time the rug was really the equity rug was pulled out from under the group. I think theres a lot of Learned Behavior out. There traditionally longer term. Airlines have been destroyers of capital. And Good Management is a fairly recent, very recent development. The concerns that we saw over the last several months is that industry would squander the profit thats are currently accruing on aircraft orders on growth and letting the ambitions go unchecked. Instead this is onest things that emerged from earnings season, were seeing that cash deployed in very very efficient means. Buying back stock, bag dif dents, deleveraging improving balance sheets. Airlines are generating returns now that are allowing them to increasingly muscle into the territory that used to be monopolized by high quality industrial transports. Most of the names trade, you know, in some cases twice the pe ratio thats we see on airlines. Before we let you go having made the bullish case for airlines, are there some that you would avoid even now . No not in this sort of market. In fact we just recently added southwest. We upgraded that name to overweight last week with a 50 price target thachl was a stock getting left behind and ignored by the market. Hopefully that one will come back into better focus for investors and we think thats pretty low risk tradeup towards