the s&p only about six points away, and it's up just about 12.3 points on the trading session. the nasdaq also some big advances. not surprising, the bid for allergan haz moved the stock up 15%. harley-davidson, that move, that stock up higher as well. >> learned a new phrase, tax inversion up there with polar vortex. that will do it. >> "street signs" begins right now about brian sullivan. is owning a home one of the dumbest financial moves you can make? hi, everybody. welcome to "street signs." how is that for an open. realtors save your nasty-grams until it's over. but who might be the next biotech to get bought? iconic investor bobs on steen is here with what he's calling one

of the biggest accounting abuses going on in america. and what the government just did, but melissa lee, this is really starting to become the energizer bunny stock market, is it not? >> it really is, brian. no surprise strength in biotechs as well as health care today on the back of that farm apalooza. we do see the biggest games up by more than 1%. in fact, three sectors making new highs, transports, energy as well as staples. mayy? >> as you mentioned, the s&p is inching toward a record closing high. this is a number up to watch for the s&p. 1890.90. it last reached those levels back on april 2nd. that's what we're watching today. we are right now just about two points away, three points away from it. take a look at the market leaders today. no surprise. allergan on the news of that bid from valeant.

harley-davidson, with good reports. netflix reporting after the bell yesterday, raising subscriber fees. vesselors like that news as well. wynn reports, a leader within the s&p 500 on the news of the increase in macaw gaming revenues, and vertex pharma, bakley one of the benefiting from the gains. on the flip side, though, as we sift through these earnings reports out, there are some loser the pentair, tsai zone bank card, and allegheny technology, lockheed martin saying the operating margins could be tough to maintain, so the to be is under a bit of pressure. the dow is not. it's up 102 points. >> certainly, folks, a big part of your market story is mergers, especially in the pharmaceutical sector, a number of big deals announced today.

some friendly, some not so much. meg tirrell is here. she's going to start with the friendly ones. >> the friendly ones really took place in the orchestrated swap of parts of these pharma companies in you novartis buying glaxo's canner business. glaxo selling the vaccine business to novartis, and then teaming up in consumer health cares with brands lie exdrin and sense odine. >> it sounds lie an nba trade. is this good for everybody? >> some people are saying it really looks like it is good for everybody. novartis was number two in cancer, glaxo number two. glaxo for a long time has been a leader in vaccine, now they're beefing up even further. >> and it has been a very strong

start to the year when it comes to pharma m & a. the strongers start since 2009. >> and that doesn't include the hostile deal we're talking about. >> let's talk about the not so friendly deal of today. and in order to identify some of the targets out there. >> you know what happened, you are staring in herb's eyes. >> totally distracted. i'm not used to gazing at herb's beauty. >> it happens to me all the time. >> it was amazing. >> herb greenberg is here. >> he is here, distracting me. we want to talk about some of the potential takeout deals. what else can be a target? let's start off here. let's start with you, where are you seeing as potential targets here? >> this is fascinating stuff.

just a couple quick points. what is driving some of these deals is not necessarily having products for the sake of filling your pipeline, but also what i call the management arbitrage. what does it mean? people are talking about bill ackman, but the real person actually instigating some of these deals and transforming the landscape is mike pearson, the ceo of valeant. this man has bought 38 companies since 2008. he's defined companies that have high margin products, integrated them, cut costs, and what he's done is got to the next deal. which means we're going to see companies that are special pharmaceutical, companies that have orphan drug status on some areas look ophthalmology, even dentistry, these are the companies that will be targets going forward. what else we have to take into account is today's three-way

dewith eli lilly, novartis and glaxo, which also tells you the big pharmaceutical companies will not necessarily go hostile. they will sit down and look at the portfolio of assets and do a swap. to me this is also a fascinating aspect of what is going on. >> i want to bring in herb greenberg. i'm glad you talked about the inquisitive name. in big ackman's presentation, there was a slide which identified potential takeout targets, but also roll-up candidates. the notion that a new val-gan as it's being called is be acquired as a whole or roll up other competitors is fascinating. that list included johnson & johnson, i mean, everybody under the sun. >> i did a piece on this last january. at the time i called up the company and said you're nothing but a roll-up. they said we are not. there's so many companies in

this country, in europe, abroad, private, public that we can acquire. there's no limit. >> except it's not a roll-up. >> maybe this is a better conversation for bob when he comes out here, but when a company just exists in large part to make deals, as valeant has, do we ever intrinsically know what they're worth? is it possible to value such a company? >> well, you keep the ball rolling. >> this is different, though. >> i keep the ball rolling. in this case a big part of the deal is you're going to strip out r&d, in fact what they said was low risk/high probability arguments. >> my point is you never have comparable accounting is my only concern. never a quarter or year where you with go back and see -- >> you have a pipeline, right? you have sales of specific drugs. >> it's true you have a pipeline, but they're going to keep $3 4u7bz million in late-stage r&d. when you this i about that,

that's really small when allergan is trying to spent that billion five over the nest five years. >> on the call this was very interesting. somebody said look at barb and lo bausch and loam. >> as a guy that deals with deals, you understand this. you're either buys established drug with established sales, or you are buying a drug that's not yet approved and haz promise and a pipeline, but nothing else. they are very different things, correct? >> i think you're absolutely right. this is a case study that everybody should follow. in 1999, or i think the deal got company completed in 2000, when pfizer bought lambert. it held on to the company and later on bought pharmacy upjohn. for five years after the deal because completed, you would have earned more of on a

ten-year treasury bill than you would have earned from holding a pfizer stock. five years, which tells you it's not that easy to integrate these big pharmaceutical deals, not only because you have the product pipeline, but also the sales force, to get rid of your sales force, extra sales force, rather, and integrate them seamlessly takes a lot of time. it's also expensive. >> i have one last question. which is the question that every viewer wants the answer to. what are the next targets out there? you gave you a list. i went through a couple of these. i'm curie from endo and shire, both of those ceos are relatively newly in place. do you think they'll sell for about a year at this point? >> i think shire is a company and i've followed it since it was 50 million pounds way back in the uk when i used to cover pharmaceuticals.

this company was built on the adhd product. this is a well-run company. it could be an aquirer and also could be bought out. if you're buying shire pharmaceuticals. it's a company that's made its name by attracting and retains top. it pays its people well. another company i want to very much quickly a they specialize in the -- if this drug can do at least a year of good sales, this could be a potential target. i think endo health solutions has been named as one of the acquirers. >> thank you very much, buddy. we'll see you again. we don't know what companies would be taken out, you've got some ideas, but if you need another example, why it pays to watch cnbc back in january at

the health care conference in san francisco. we interviewed those two companies, aggios, interimmune. since then two of the best performing names year to date in biotech. can i just say one thing? when you mention endo, that is known as the son of valeant, because it has former valeant experts. it's more of an acquirer, the way people look at it. >> meg, thanks as always. let's get to dom which you chu for a quick flash. >> taking a hit in today's trade. it's a smaller company. the stock is down 7%, 8% after it warned of a bigger than expected loss due in part to the cold winter. they also said margins were -- heavy discounting, the stock is down around 14% over the last five days or so. so taking it on the chin today,

bebe. here's a question, is buying the home the single worst financial decision? i think more people are saying yes. >> plus bob olstein is here. you're going to hear it here first on "street signs". and why the banana trade is simply going bananas. "streets signs" will be right back. >> that joke had a peel. [ male announcer ] the wright brothers started in a garage. mattel started in a garage. disney started in a garage. amazon started in a garage. ♪ the ramones started in a garage.

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the skids last month. diana has the whole store. >> they haven't really moved for two months now. more blame weakened affordable. overall home sales moved down just 0.2%, but down 7.5% from a year ago. the median home price up nearly 8% from a year ago. it's actually less than the double-digit price gains we saw last year. here's where it gets interesting. look renalenly. sales are up in the northeast and midwest, where price gains are smaller, and else are down. thanks to investors, so zillow

now reports that several areas in california are now unaffordable. major metros like dallas, houston, denver, pittsburgh and san antonio, zilloz says prices will reach new peaks. that does not necessarily mean higher sales, especially because the -- if we want to know what the next few months will hold, take a look at pending home sales versus mortgage perform applications. you can see how these two lines split a bit from 2010 to 2012. that's ball all cash investors were ruling the market. now those lines are trending back together again as regular buyers get back in, the trend is not as high as we they'd it to be at this time of year. one caveat, though, all cash sales are still running historically high. we're also hearing that more

regular buyers, not investors are using, because they need to be more competitive. more of course, online. back to you. diana, thank you very much. we're going to stay on real estate. all right. jed, this argument in "the washington post," really an op-ed people, americans think owning a home is better than it is. the idea that the author lays out is that we almost always overassume the return on our investment, leaving out the cost that housing has intrinsically built in. you may not want to touch this one. is owning a home a good or a bad financial decision? >> brian, of course i want to touch this one. the question of whether owning a home is a good investment always depends on compared to what? if you're going to buy a home and let it sit empty, then of course you would make more money putting your money elsewhere. but when you buy a home to live

in it or rent it out, you're capturing rent or not paying someone else rent. the way to see whether it's a good investment depends on not only what the appreciation is going to look like, but also on all of the other costs, including what you get knocked off your taxes in mortgage, interest and property taxes. right now about 38% cheaper than renting nationally. it depends on where we are in the cycle. at the height of the bubble, renting looked like a much better deal than buying. >> but historically -- >> but you would have to pay rent, brian. >> yes, the owners -- i'm not leaving out owner's equivalent rent. i understand the economic concept. you have to live somewhere. >> you have to pay rent to live somewhere, so -- >> it's not the entire investment in a home. >> listen, do you think -- how about this? do you think people overestimate how much they're going to make by owning a home? >> i think people often do

overestimate what appreciation might look like long term, but you have to remember there's a lot of volume activity. some years prices rise sharply, other years prices fall, so you have to factor in the risk that prices might fall, but the two other important things that affect whether housing is a good investment of the first one is that it's not liquid. that means it's harder to unload if you suddenly need a lot of cash. that can be a bad thing if you need to flee the country quickly and take all your money out. it could be a good thing, no, if you're not good at saving and you want homeowner to force that saving. >> if you're on the lam, it's bad. we're going to pause here. dom has a market flash. wrestle a new letter from green light capital from david einhorn, revealing new holdings and a warning we're possibly in a tech bubble. green light has added new stakes, both of those stocks are

up about 9% just off the session highs. the letter also said the firm has made money on its investment in micron technology. green light also said it closed out a short bet against which i pot lay, as well as a long bet on general motors. the letter also says we are witnessing our second tech bubble in 15 years, also saying investors should also be worried about some of the impacts of high frequently trading. he disclosed interestingly enough that his firm owns a small stake in the iex, the exchange broker dealer platform that's the focus of "flash boys" book, and says invest are owes should route their orders to iex. >> that's interesting, dominic chu, thank you very much. >> we talk about it. >> sandy billry, pitched it a few months ago, and the stock tanked. he's coupled on to defend the position.

and the skoomts, melissa, about it being the second tech bubble they're generally about companies, what do you make of it? >> i think it's interesting, he's given the green light on micron, at a new 52-week high, could not an all-time high. this is one stock that mime might say it has been a bit overdone on the up side, but you know, he still sees a tech bubble. >> and jed, because of this, kind of a big market flash, we're going to leave it there. a great debate and discussion on the benefits of owners ver renting. we'll get you back on to continue it. sound good? >> sounds good. coming up, america's trillion debt crisis, student local debt, and now the government seems to be realizing that some of the new programs might have made it worse. >> government making things

worse? wow. first the earnings squad is back in action, with three of the games you need to watch. "street signs" will be right back. can you start tomorrow? yes sir. alright. let's share the news tomorrow. today we failrly busy. tomorrow we're booked solid. we close on the house tomorrow. i want one of these opened up. because tomorow we go live... it's a day full of promise. and often, that day arrives by train. big day today? even bigger one tomorrow.

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welcome to the earnings squad. joins me today dom chu and herb greenberg. 20% of the s&p 500 company versus report sod far, 63% beat eps targets, 50% of net estimates, 22% have come in below forecasts. we kick it off with isrg, we go to the chief correspondent, herb greenberg. >> that's all i do. you know, this is going to be interesting. on one level there should be no surprises. they came out and disappointed. what was interesting there, and what you'll want to hear the company take about is procedure growth. procedure growth was up 7%, but that was a disappointment, down from 20% a year earlier. i have to tell you some, analysts were out after the company said this, actually blaming it on the weather? >> the weather for surgeries? >> if chipotle -- >> don't they have it indoors? >> they do, surgery is really just deferred for a few weeks or

so, also for the first time gynecological procedures down, which was a very big surprise, so you have a new machine coming out. that new machine calls the da vinci xi, people will say that will drive new sales. it's $1.8 million. we'll see. >> will they talk about orders today? >> you would hope. the orders aren't there yet. they're doing swap-outs. they should. >> let's talk juniper networks. analysts will be looking for progress towards their started cost savings targets, $160 million. all right a lot of analysts have made pretty tough choices on the road to achieves that target. the approximately 6% reduction in worseforce, does a back of the envelope calculation says that reduction in the work force

could give it money toward the stated target. also they're looking for progress in terms of divest turs or winding down businesses that aren't as profitability. could they wind that down? could they pursue a narrower focus when it comes to security as well as other routers? we'll see on the conference call, but this stock has been a pretty decent performer. >> this is a pretty decent stock here. if you go to the hardware side of things, it puts it in the same realm as ciena, cisco, everybody else. we'll see if the earnings justify that. let talk about kfc and yum brands. mcdonald's actually mentioned taco bell breakfast not hurting mcdonald's breakfast. >> right, something we mentioned yesterday, when we were talking about mcdonald's, this time around that breakfast theme is going to carry out again. it was the end of march that taco bell introduced their breakfast menu. you will not see a full impact of any breakfast sales this time

around, but is there any commentary about where they see this commentary going? breakfast in the u.s. is a big thing, but even bigger is china comp store sales. they're expected to grow by 961% of sales just overall came from china, so that's going to be a big key. i notice sara eisen will be watching the call. that's it for earnings squad. we'll back tomorrow with the earnings preview. back over to you. thank you very much. green light capital's david einhorn reveals new stakes in sunedison and conn's. investors will join us by phone to talk about that. at delta we're investing billions of dollars,

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a a few minutes ago we brought you the news that new stakes are being taken in conn's, a friend of the show has been tooting its horn for months now. he joins us on the cnbc newsline, obviously, sandy, you've got to be very happy with this news? >> yeah, i think it's going to

work out very well for shareholders. if you look, you know, just recently, the stevens family made insider purchases. now their stake is up to 12%. so it's going to have good company, and i'm looking forward to seeing what happens here. >> it's funny. today we had another hedge fund coming in and taking a big stake in dillard's. when you see value, and i know you could speak for david einhorn, but are you basing it on the actual retail? or is it a real estate play or both? >> you know, what i look at, you look and where the company -- they can make $3.32 or so earns in 20, and the stock is cheap. they're growing north of 25%, and looking at a multiple, depends on where the stock is, but you're looking at a 12 multiple in earnings. that's a cheap stock. i think if they can grow as they

have been, and get a handle on the delinquencies that were a small issue that pushed the stock down, i think people are going to make a lot of money. >> sandy, what's yours cost basis for the stock? we have a one-year clarity. you can see the high in the stop was reached bakley at the beginning of the year, and it's been a rough ride. >> we bought it the december before that around $25, $26. it actually was an offering where the stevens family sold some stock. i get we've been the largest shareholder since then, or right next to the stevens family. so it's one that i think will work well. the ceo is a cpa by trade. he's a conservative person, so i think he's got it under control. the short-lived reasons with colder weather and a lot of customers had a hard time getting into the story to pay the bills, and utilities costs that went through the roof with

a colder than normally winter, they had to make the decision to have their lights turned off or basically, you know, have their big-screen tv, you know, delinquent. i think these are short-lived and the story still has a lot of legs. >> sandy, great to have you with us. thank you. part of the move higher is the short interest about 15% according to thomson reuters, so that's certainly propelling the stock higher. a mixed day for mcdonald's first quarter earnings missed estimates, but march sales were better than expected, especially around the world. let's talk all the technicals, rich ross on, zach karabell, zach, here you go. mcdonald's in the last 12 months has gained less than -- while burger king, jack-in-the-box,

wendy's has been gained -- what has been wrong with mcdonald's? >> that sounds like dinner at your house. >> for brian alone. >> i think mcdonald's is -- should we even talk about this? the ultimate safe name. it goes nowhere when it misses. it doesn't tend to rocket when it goes well. it's a big of proxy for global consumption, no pun intended, middle class rising. i don't find this as overly interesting equity. if i'm going to get the kind of returns you get from mcdonald's, i would probably rather look at a bond. i feel realty neutral if you want to own it. >> my savings account gave a better return than mcdonald's. rich, what do you see in terms of the charts? >> i'm going to take the other side of the argument. when i show you a longer-term chart, it's been a fantastic performer, but let's bring up

that one-year chart. last year obviously a horrible performer. stock down 10% from the peak you set early 2013. but one that downtrend, you set up a nice rounded base of support with a double bottom in there. that allows you to re-claim that down trend and the 200-day moving average. just interesting we break above the neckline of that base. now, yes, we're getting a sell on the news today, but that's the time you want to be a buyer of mcdonald's. if we can zoom out and get to the longer-term. you'll see look at that moving average, it's held for the last 12 years, that's a pretty nice guy signal. back in 2009, it didn't touch it against until 2012, so i'm not saying another three-year run before we test it, but i like my odds. slow and steady can win the race, especially in a market that's unique to a sharp decline like the one we're in today. >> if mcdonald's had tracked the s&p, it would be 125 plus a

share rather than 100. no one will get hurt for owning this. it yookd to be an aspirational stock, i don't know that that's still the case. i just don't see this outperforming the overall market. >> two different views, that's why we do it. that's explains talking numbers in this segment. guys, thank you very much. be sure to check out the online edition. our next guest says companies should change the way they report earnings. herb greenberg has a little something to say as well. >> student loan debt crushing many young people's financial futures, so the government decides to, quote, help. is it making worse? first, let's find out what's happening on "closing bell", guys. >> we thought you would never ask imts i didn't, either. the dow and s&p 500 are

flirting with all-time highs as we speak. now is it full steam ahead for the markets? we have an all-star panel standing by. and minnesota governor jesse ventura says ceos should make the same amount of money as physical laborers. and shark tang's kevin o'leary thinks that's absurd. and buckle up. tonight we have at&t, yum brands, amgen and gilead sciences. everything is covered for you coming up. all that and more coming up on "closing bell." tdd# 1-888-628-2419 searching for trade ideas that spark your curiosity tdd# 1-888-628-2419 can take you in many directions. tdd# 1-888-628-2419 you read this. watch that. tdd# 1-888-628-2419 you look for what's next. tdd# 1-888-628-2419 at schwab, we can help turn inspiration into action tdd# 1-888-628-2419 boost your trading iq with the help of tdd# 1-888-628-2419 our live online workshops tdd# 1-888-628-2419 like identifying market trends. tdd# 1-888-628-2419 now, earn 300 commission-free online trades. call 1-888-628-2419 or go to schwab.com/trading to learn how.

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at no additional cost straight to your door. viagra home delivery. get started at viagra.com. as you know we're smack in the middle of earnings season. our next guest is calling for an end to the madness. he says it needs to stop right now. bob olstein is here, all fired up. herb is fired up, as they both always are. >> we should just tape the commercial break. >> the issue, bob, is with these adjusted earnings, adjusting for, quote/unquote, one-time or nonrecurring, which you say are recurring way too many times. >> in 2012, the difference

between gap and reported earnings was $140 billion. that's a huge number. every quarter, we look at our fund, the olstein fund looks at reported earnings and adjusting them. there's one company here i will not name -- seven nonrecurring items. stock compensation expenses -- >> why won't you name the company? >> it's not relevant, because they're all doing. >> it's a tech company? >> no. >> i thought they were the most egregious. i'm going to pay you 50 cents, but give you a billion in options. by the way, that's not an expense to me. >> so i've just fooled my employees giving them something that's worthless. that's egreej usa. i like the disclosure. what i do not like is the difference between gap and adjusted and who's making those adjustments -- management. they get compensated on rights and options. it's the fox watching the chicken coop.

>> you know, bob, what's interested is that it used to be ebit ebitda, now gone to adjusted non-gaap, but by the way, wall street says okay, management wants us to look at that. >> eventually it comes back to free cash flow. the ones holding the bags will be the unsophisticated investors. >> it's not illegal and not new, right? especially the options. why do you think so many investors overlook this -- by the way if you took accounting so 1, as i'm sure you did. it's out there. why do so many smart investors ignore this? >> not many people like you took accounting 101. they don't understand it. >> when we are reporting earnings as the media, it's always versus expectations. the expectations also reinforce this idea that you're looking at the adjusted earnings, because that is a number that's

comparable. you're always looking at adjusted. if you're europe gaap, you have no comparison. >> who needs estimates. you need to value a based on what they're really earning. this game of comparing estimates to -- >> you know that's the game. >> it's a big game. wall street has become a gambling casino, but allowing value people who care about the real numbers to make outstanding returns. you're going to get the social networking companies and all these other companies, with the -- >> but bob, these are growing companies. they would say don't look here, look there, because we have a long runway, and even if they're making money, it's not the type of growth that people want to see because of the other expenses. >> i said this on your show before, if i start pumping the air out of the room, what are you going to do? if you don't eventually get cash flow. amazon has been doing it for ten years. their cap expenditures, take it away, they have a deficit in

free cash. >> but people have ignored it. >> did you ever play russian roulette? >> thankfully no. >> you're saying eventually it will come to an end on what you're saying. but it hasn't. what's going to cause it to come to an end? >> i said during the enter net boom, you told me i don't understand it -- not you personally. and basically it eventually comes -- the caveat is if amazon comes out with real about free cash flow, it's to 12 years, different music, same dance. >> who cares about a wovgy discussion on account. if you're buying the stock for what it's supposed to be, which is the future valuation, then the gap between non-gaap and gaap earnings is only growing. do you believologies basis, bob, that the entire market is overvalued, because it's trading on a multiple of fake earnings from non-gaap?

>> i don't care about them. of course it makes sense, but -- i could buy the johnson & johnsons sitting there at eight times earnings, and you could buy these value companies everybody finds boring, our fund was up 37 last year. >> can you give us a good name. >> good solid earnings, clean earnings. >> dillard's, the guy that bought dillard's. this guy is looking at value. a free cash flow yield of 9%. >> second mention of dillar's positively today, plus conn's. >> it's not the retailers. it's the free cash flow. >> not if you're up 37% like you, bob. fill lebeau, what's going on? itches the age of unionization has come to jetblue. the airlines pilots have voted to join the air line pilots association. 70% of the jetblue pilots cast a

vote saying they will be joining the union. this is the first worker group within jetblue that has voted to join a union. again the pilots at jetblue have voted to join the union, 70% of the votes cast in favor. back to you. >> phil, thank you very much. is all the government help in the student local market actually hurting the students that are in the student loan market? we're going to talk about that. and what is killing the world's bananas? should you be concerned about a worldwide banana short an? stay with us. ♪

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two new two new reports today on the student loan crisis. the second report showing that government programs to help ease student debt already costing taxpayers too much and could be encouraging schools to jack up tuition even more. that's right. raise tuition even more. let's bring in cnbc contributor jimmy. there are those who say that wall street's the problem with student loans. all i know is this. in 1993, fewer than half of college graduates had a student loan. banks existed then, too.

now it's 71% and the gap is -- the debt limit is just growing. where do we stand right now? what is the government doing? are they helping or are they hurting? >> well, listen. if you have a situation where you have very easy credit, opaque pricing, key players not having skin in the game, i think we saw during the financial crisis what happens. you get people taking on too much debt. you're going to get a lot of banks. encouraging by making that credit de facto even easier. i think that's the problem. we need a completely new model for both how we finance higher education, and basically how we give people degrees. >> jim, i'm curious, when you say the players need to have skin in the game. who exactly are you talking about? when i first heard that, i assumed the students because of the loan forgiveness. if you're not on the hook to pay that loan, you may not make the best choice for you because you think you don't have to pay for

it. >> i think colleges need to have skin in the game. listen, there's no incentive for them to help guide these students into majors that may have a higher return on their investment. first of all, we don't have good data what the best majors are exactly or what the best schools are as far as return on investment. if these kids go on default, the schools have to cover some portion of that to give the universities themselves some skin in the game, as you just said. >> here's the paradox that we're in, though, jim. college is now so expensive, most people can't afford it without a loan. but it's pretty much proven that college is expensive because of what you said, cheap and relatively sort of easy-to-get credit. how does it reverse? college costs are up 500% since 1985. >> right. and that is in real terms. that is adjusted for inflation. i think we need to move from debt to equity. i'm not saying this is the only solution, but there's this thing called income share agreements, where basically you'll have investors invest in the

students. so when the student's gone to the work force, part of that income will go back to the inves or t -- investors. it focuses the attention of the students on what they're going to major in. >> so you want to actually introduce a market dynamic to the educational industry. so there are investors, buyers, and sellers basically here. what happens to the government? >> first of all, there are already people doing this. what we need from the government here is a little more regulatory certainty about how these contracts are going to be enforced. there's some legislation already moving on that. but listen, we need to get market forces involved here. the government may still have a role, but i think it should be a smaller role. >> i'm not sure i agree with the first proposal, because owing somebody a portion of your income, that's -- >> isn't that what a loan -- i mean, taking out any loan, you're owing somebody a portion of your income. >> i agree, but it's a private -- >> what makes a difference? >> you may not have the protections that i have. listen, i have student loan debt

still. >> and i paid mine off, so it's not like i don't know what student loan is. >> pretty much now every guest of our show going forward is going to have student loan debt. >> if all we do is feed more money into the system -- hey, free college for everybody, it will not -- one, it will not force these colleges to change how they do business. they need a lot more competition. right now it's very hard to start a new educational institution. it's hard to offer people college credit if you're not offering them a four-year degree. all that needs to change. >> meantime, the top ten endowments are sitting on about $200 billion in investments. somebody just gave dartmouth $100 million. a one-time donation. you know how many real educations that could fund? dartmouth. they're good at rugby, though. jim, thanks very much. do appreciate it. good discussion. >> it's a great discussion. >> everyone says wall street is at fault. but ever since credit was

introduced, everybody can borrow whatever they want and college tuition goes like this. another el nino could be coming this summer, but it won't just mean crazy weather. it could also have a big impact on food and commodity prices. jane's got that story next. announcer: where can an investor be a name and not a number? scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. because i don't trade like everybody. i trade like me. that's why i'm with scottrade. announcer: ranked highest in investor satisfaction with self-directed services by j.d. power and associates.

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banana drought. don't worry too much, there are at least 1,000 other varieties of bananas in the world, so it won't be the end of bananas. but there could be a temporary shortage. >> well, i thought we were done, by the way, talking about the financial impact of weather. spring is here, the sun is shining. but now we have to tell you about an el nino, which could come and cause commodity prices to rise. but others, though, to fall. the always sunny jane wells in always sunny l.a. with that story. >> sunny not for long, brian. they're saying the chances of an el nino later this summer into the fall are at least 50%, almost as high as 70%, and it could be a big one. which means, roll the video, we'd go from this, to this in california. usually means cooler, wetter weather in the u.s. and parts of south america. drought from asia to australia. could mean higher cocoa and coffee prices, wheat in some places, but lower corn and soy bean prices. it would be cheaper to feed

bessie, so some meat prices could come down. it could also impact metals. nickel supplies are already expected to be light this year. michael hague tracks about a dozen commodities that could be impacted. he said it may impact energy prices, if we have a cooler summer and maybe a warmer winter, wouldn't that be nice. >> they are calling for an event that rivals the event in '97-'98, which is dramatic. but for some commodities, you don't even need that. the case of palm oil, a classic example where i think it was in 2000 where we had this event. but it was moderate, prices still doubled. >> three sectors to watch, meat producers. they'll benefit from lower food costs. beef in particular, because more rains will mean pasture lands, so u.s. cattle ranchers can begin to rebuild the herds after years of drought. and finally, look at this chart. el nino could cause "a

significant dig location in agricultural production, which is good for grain merchants. you can see down year to date. back to you. >> all right, jane wells. it was a pleasure. thank you very much. and thank you all, by the way, for watching "street signs." >> i'll see you tonight on "fast money." "closing bell" is up next. and we do welcome you to "closing bell." >> in one week's time, we have gone from worrying about a correction to now watching for new all-time highs. the dow suddenly knocking on the door. roughly 25 points away. and the s&p isn't too far away either. roughly seven points. today's rally coming even as we learned that existing home sales are slumping. they're at the lowest levels since 2012. what's the disconnect between that and the stock market? we're going to find out what's behind today's move. >> yeah, just keeps going.