Performers in the s p and google and microsoft both reporting in three hours time from now. Plus the water crisis in california. Beverly hills making a big move in the last few hours. Were spending much of our time in the golden state covering the Economic Impact of this severe drought. By the way, that is where we find Brian Sullivan. Hes right off the 5 just northeast of los angeles in castaic castaic. How are you going . Reporter im going all right. I think im going better than this reservoir here. This is a major crisis in california and the Economic Impact too, not just environmental, cannot be overstated. Los angeles today saying it is going to rewrite the water rule book cutting landscape watering to two days a week from three. Officials are debating what parts of los angeles are worth spending water money on and which parts are simply not. Too far gone already. Beverly hills, the posh enclave issuing its open water rules. Fining Property Owners 1,000 each for water violations for things like filling swimming pools and washing cars with drinkable water. How do we solve this crisis and what is the exact cost . Difficult to calculate this drought, but this is into the multi billion dollar range. Certainly tens of thousands of agricultural jobs already cut due to the drought with likely more to come. California, of course not only has the biggest farming economy in the u. S. , it has the biggest manufacturing economy in the u. S. It is the biggest state economy in the u. S. And the eighth biggest economy in the entire world if it was its own country. Jane wells is live in San Diego County with a place, jane they are hoping might be able to help solve some of this crisis. Reporter hi brian. Right behind me is the largest desal nation plant ever constructed in the western hem fear. Were starting with big farma with an f. California farmers feed the world. There is a huge fight between them and residents because city dwellers have to cut back their water, farmers dont. People are going nuts over almonds. It takes one gallon of water to make one almond. What do the farmers say, especially sips most of those nuts are exported. If City Residents have to cut 25 , why dont you have to cut 25 . Unfortunately, were in the federal irrigation district. I know weve taken criticism in the last couple of weeks that the farmers arent doing their fair share. I will tell you two years ago we got 40 of our water allocation. Three years ago. Two years ago we got 20 . Last year we got zero. Reporter could some of your groundwater be pumped to go to cities . In other words, take it away from these trees and send it to people who need to drink water . Well ultimately people will always have the first call on water and in an extreme situation im sure that up and down the state, groundwater pumped resources would somehow be delivered to incorporated into the aqueducts and moved for people for not only health and safety but just for general consumption. Reporter do we need 6 billion in almonds . Wed love with fewer almonds. Everybody could live with fewer of every crop im sure. But almonds are in such demand not only in the u. S. But around the world. Its kind of ironic that now we are actually growing crops that are in great demand for the market around the world and that were being criticized because were growing crops that are now exported. Its a little frustrating. Reporter now mark borba is not going to pull out any trees but he is instead not growing other crops like lettuce. In fact farmers have fallowed a half million acres but thats only 2 of total cropland. Back to you. All right, jane thank you very much. Much more jane wells, throughout the next couple of hours. Weve got a live farmer will be joining us as well. Hell tell us what he thinks the problem is and how we can maybe solve this. Vertical farming is another way to deal with the drought. Traditionally this is done inside where crops are stacked on top of each other and grown with artificial light. Here in california one farm is taking the indoor idea outside. Eric cutter runs a vertical farm in irvine california where he says plants are thriving using 50 less fertilizer and just a fraction of the water. If we scaled it out to one acre it would actually hold about 100,000 plants versus 26,000 plants an acre in a typical orientation on a conventional farm. So what youre getting is about four times the yield. This is all hydroponic. Were using 70 to 80 less water. The strawberries are growing in coconut fiber. Were growing outside which makes it a little more difficult in the sense that we have all of what nature can throw at us but this system has a lot of promise. Reporter vertical farms also have lower initial capital costs as well. Think about it no need for tractors no need for other big heavy equipment. Well have much more from droughtstricken california coming up all through the next two hours of power lunch. Were talking to a fire guy, weve got a farmer well talk about the economics of water. And you know being from australia, all about droughts. You guys have had your fair share as well. We always have our fair share of everything like that. Right now of course massive flooding, the complete opposite of the drought problem going on in southeastern australia. Okay thanks very much brian. Thanks, jane. Well get back to you very shortly. Lets take a look at whats happening in the stock market. Theyre moving higher with the s p 500 currently sitting at 2118. The record close was 2117 actually were sitting right now so we have today surpassed that high. The nasdaq however, is the really big story here. Its near an alltime high going all the way back to the year 2000. Bertha coombs is tracking it at the nasdaq for us. This has been a story 15 years in the making which i would have never thought. Whats really moving things right now, biotechs the usual suspects are very strong. Biotech up nearly 1 . Apple up nearly 1 . Apple started to move higher ahead of its earnings next week. A lot of folks watching to see what kind of dividend payout it will do what kind of buy back it will do but the heavy lifter today are the big caps. Weve got alltime highs on like oreilly automotive, dollar not impacting them citrix also beating, ebay strong and comcast surprisingly strong today despite of the fact of potential headwinds with an fcc hearing looming. Also were seeing the chips today ironically being the big drag. Qualcomm texan, Texas Instruments disappointing thats dragging down the sector. Yet were seeing the nasdaq potentially at a new alltime high close today. Part of the reason is that this year the heavy lifters have been the big cap tech stocks. They are up about 6 or so. But small caps have started to catch up. In no small part because of biotechs. Take a look at the biotech gains year to date. That is one of the big drivers here. Of course mandy, the story there is all of the consolidation. Back to you. Thank you very much bertha. Well it is the busiest day of the earnings season so far. More than 50 companies in the s p 500 are coming out with their reports. Airlines among them. Southwest, united and alaska the big ones to watch today. United is down by 2 . The other two up by over 1 . Phil is our man on the job breaking down the latest results in the airlines. How are they looking . Despite the mixed reaction were seeing both earnpost earnings, the numbers exactly what you expect. Strong demand and lower jet fuel. Yes, we might look at the Airline Stocks and say, well sort of a mixed reaction people should be more excited about it. Remember, these guys have had a heck of a move already. Look at these First Quarter numbers. Three things driving it. Youve got strong demand. You look at revenue per available seat mile and its extremely strong. Youve got lower jet fuel costs. So on the cost side of the business things are looking good. The First Quarter is sometimes where the airlines can get trimmed up by major winter storms having big impacts on the bottom line. Yeah we saw some storms but it was not a huge impact. I want to show you the shares of american airlines. Why are we putting these up . Because tomorrow american will be reporting. If you look at american over the last year its had a heck of a move. This has been paying off for ceo doug parker. Now, mr. Parker has taken the unusual step of foregoing his Cash Compensation for next year and he instead will be paid in stock. Now, some people say, ive seen this before in the tech industry. Yes, when the stocks go crazy in the tech industry. We never see this in the airline industry. But doug parker has been a big believer in you know what you hit your performance targets investors will reward you. Thats what were going to be looking at tomorrow. American airlines when it reports earnings a big week for the airlines mandy. It is a very big week for the airlines. Coincidentally alaska air is the pick of one of our guests later on today. Okay. After three strong months of gains, new home sales are just running out of steam, posting a sharp drop today. A temporary blip or a sign of things to come . Thats all coming up. First, lets get back out to brian in california. Bri. Reporter all right, mandy, thank you very much. Folks, you can see the low water line behind us at castaic lake northeast of los angeles. Its a Recreation Area but also an important reservoir. You can see i dont know if you can see or not. We are a couple hundred feet below the normal level or the peak level as well. It just goes down down down. Big money, not just Environmental Issues are at stake, big money as well from agriculture, manufacturing, et cetera. Big money. Power lunch is live in the heart of the california drought, the worst in decades. What it means for everything from the upcoming wildfire season to the way people live their lives in the golden state. Plus the business side of the story. Where you find problems you find people searching for solutions and opportunity. More live from california coming up on power lunch. Female announcer sleep trains interest free for 3 event is ending soon get three years interestfree financing on beautyrest black, Stearns FosterSerta Icomfort even tempurpedic. Plus, get free delivery, free setup, and free removal of your old mattress and sleep trains 100day low price guarantee. But hurry sleep trains interest free for 3 event is ending soon. Guaranteed sleep train your ticket to a better nights sleep welcome back to power lunch. Comcast shares trading up 2 . Investors seem to like the idea of comcasts Time Warner Cable acquisition falling apart thanks to the potential regulatory roadblock. Why . Comcast faces for breakup fees. The cable tv business has become less appealing and opens the door for comcast to make other acquisitions. Now over to brian in castaic, california. Reporter thank you very much. All across california, Fire Agencies are now gearing up for what could prove to be a very long and a very challenging fire season because after years of drought, the states wildlands have plenty of fuel. Dead trees, bone dry grasses and shrubs. We visited a Ventura CountyFire Department where theyre adding firefighters ahead of the wildfire season. Were going to sevenday staffing and bringing on those Additional Resources that we use to carry us out through the fire season. The large fire Growth Potential because of the drought and the reduction in snowpack all of those fuels at a Higher Elevation that are not normally available to burn are available now, because we dont have the moisture in there. Reporter and coming up in a few minutes, we are going to be speaking with a top firefighting official from this area right here in Southern California. Were going to get the game plan. Indeed, mandy, if there is one, because you also generally need water to fight fires. You absolutely do. Thank you very much, brian. Well get back to you shortly. Very scary times. Well shares of General Motors are falling about 3. 8 on weak earnings. The auto giant missing on both the top and bottom lines. The company hurt by lower demand in russia and in south america. Dunkin brands is up 8 and on track for its best trading day since its ipo all the way back in 2011 not so far back. The doughnut chain beating its earnings expectations. Plus pepsi beat profit estimates thanks to growing demand for its free throwitolay snacks. New home sales dropping to their lowest level in more than one and a half levels. What happened, diana . These are actually contracts signed in march, not closings so warmer weather did not bring buyers down. Sales down 11 monthtomonth but that was after a pretty big upward revision to february. Sales are up over 19 from a year ago but last year was pretty awful for the builders so an easy comp there. Prices are the bigger story. The median price, 277,400. Thats a drop of a little less than 2 from a year ago. This is where the builders are stuck. They have been pricing high because they say thats their buyer base and their costs are also high. But todays buyers are becoming increasingly price sensitive. Even in a tight market for listings, they will not overpay. More online of course. Mandy. Thank you very much diana. Amazon and google are gearing up to report their earnings. Amazon stock is up 25 this year. Google is higher by only about 3 . Should you buy them ahead of the results . What you need to know before you make that trade. Power lunch is back with all the information you need in two. You used to sleep like a champ. Then boom. What happened . Stress, fun, bad habits kids, now what . Lets build a new, smarter bed using the dualair chambers to sense your movement, heartbeat, breathing. Introducing the sleep number bed with sleepiqtm technology. It tracks your sleep and tells you how to adjust for a good, better and an awesome night. The difference . Try adjusting up or down. Youll know cuz sleep iq™ tells you. Only at a sleep number store where youll find the best buy rated mattress with sleepiq technology. Know better sleep with sleep number. Welcome back to power lunch. Im Brian Sullivan at castaic lake. You look at the water usage. About half of it is used on landscaping. What if you could use your used water from your home the gray water that you use in the shower, and yes, even the toilet, and convert it to feed your landscape . Gray water is basically water in your home thats from the showers and from your laundry. You can reuse it on site for things like flushing your toilet or irdebating your landscaping. We call it for example, showers to flowers or laundry to landscape. Reporter the system is mostly used in the construction of new Single Family homes. Heres one simple way. Used washing machine water, they are converting that to feed the lawn. This is a system that everybody can use. It has just the water coming out of the wall and then it goes into a filter bag. It fills up the tank with filtered gray water. Controller turns on the pump and sends the gray water around to the irrigation valves and irrigates just like a regular irrigation system. This is extremely cost effective. Reporter a lot of people thinking, okay how can i do that . Youve got to switch over and the process costs about 2500 for installation and about 5,000 to install it in a newly built home. So the conversion is about half the new install. After the initial up front cost hes saving 40 a month so it adds up right . Well talk more about this gray water usage on dorms, commercial properties as well. We wont get as much into the toilet aspect just because this is a family program. Back to you. Well, for a very long time places like singapore, which believe it or not do have a shortage of water, Drinking Water despite the fact that its a tropical country, its been drinking reconstituted sewage for a very long time. I used to drink reconstituted sewage. Of course its been treated, its completely safe to drink. Its psychological when you think about it, oh my god, its reconstituted toilet water, but you know what, youve got to do what youve got to do. If you dont have enough water, thats what happens. Well get back to you very shortly. Dont screw up your nose brian. It was a scheme that prosecutors say netted hundreds of millions of dollars. 25 doctors have already pleaded guilty and many more may be charged. Andrea day is here with crime punishment. This is still a very active investigation and now the mastermind who is literally out for blood is about to learn his fate. Take a look. Youre watching some of the most soughtafter cars in the world go up for sale. The vintage lot raking in millions at auction. 400,000 but its the man behind them that has the feds on overdrive. He had a lot of money to throw around. According to court documents, david nick ol spent millions getting cars fancy homes, chartering jets buying football tickets, even shelling out 150,000 at one strip club. All that cash was literally blood money, coming in from illegally sticking it to medicare and private insurance companies. He found this fraud scheme very profitable. Health and Human Services special agent in charge Scott Lampert speaking exclusively with cnbc about the case thats still under investigation. This was in excess of 200 Million Health care fraud scheme. One of the largest ive seen. The scheme being run out of this blood lab in new jersey. David nicole at the top. A relatively small lab, seemed to be responsible for a large share of the business in the state of new jersey. Lampert says thats because bls was paying doctors thousands of dollars in kickbacks to send blood work to the lab. The corrupt physicians ordering tests for their patients whether they were needed or not. This lab was paying 150 to 200,000 in kickback payments. There were a dozen physicians that actively participated in this scheme. And he says nicole his brother scott and the bls team worked hard to keep the bribes under cover, in some cases creating sham lease agreements to make it look like bls was paying doctors for space in medical offices instead of for blood. He was very concerned with the amount of money he was bringi