time they have undershot it and earnings have come out positive, less quarter it was very small. less than 1%. this is going to be a big hurdle for them to job. -6% growth is the estimate. some believe there is -- the bar is too low. growthn terms of versus earnings and revenue, there is the correlation between the two and basically for every 1% change in nominal gdp you are looking at 2% and revenue. .2 negative percent on gdp for the first quarter. >> that is a pretty amazing chart. i tried to wrap my head around why that would be such a multiplier. we have had a negative first quarter for the first month. >> thank you. a real power player. are hedging against commodity prices. bring you live reports from the ground in just moment. we want to take a look at some headlines crossing. the very is choosing ubs to help manage its ipo later this year. jpmorgan and goldman sachs will play a role in selling 10% of ferrari's shares. planning to cut 40,000 troops and that is according to usa today which says 17,000 employees will also be let go. by army would have 450,000 the and of the

every other time they have undershot it and earnings have come up positive. last quarter, it was very small, less than 1%. this will be a big hurdle for them to jump. -6% growth is the estimate. is way tooe the bar low and we will have some growth but even if there is growth, it will be very small. if you take out energy, the actual earnings growth is much more than buybacks for this year. in terms of growth versus earnings and revenue, there is another chart that talked about the correlation between the two and basically for every 1% change in nominal gdp, you are looking at 80% change in revenue. ofare .2 negative percent gdp for the first quarter. mike: a pretty amazing chart. head around why that would be such a supply or like that but we have had a negative first quarter ended corresponds with what we saw in the first quarter. thank you so much for your insight. mike reagan. coming up, a real power player. you will hear from the ceo of dynegy about how he is hedging against commodity prices. alix: we are live in new york and athens tonight to give you th

is that -- i thought they undershot on the inflation targets. >> only because of external influences.ok at inflation, the headline number, disaggregate that in your mind. what are the external implements? take those out. when you look at pressures, they are clearly picking up. that was ignored earlier this century. that is why the economy overheated. you look at average earnings numbers, they have picked up sharply. we are almost at record levels of employment. we have record levels of job vacancies. this is a tenths situation. manus: let's talk about the federal reserve's. they are finding it tough to stand up and say it is time to hike. >> they are in the same mood as the bank of england. looking for excuses not to increase. greece and what is going on in china, other emerging markets are providing them with that excuse. they have similar circumstances to the u.k.. you have to understand that the art of monetary policy is not to react to what happened yesterday. the art of monetary policy, the reason you have highly paid people is to anticipate what the economy is going to look like

it has shrinking economic growths and government revenues that have consistently undershot their markfunding gap and raising questions about the island's ability to pay off more than $70 billion in collective debt in the long term. the governor said as much. tomorrow's mispayments could be the first concrete evidence of that. some officials are pushing to allow some of the cash strapped borrowers to file for chapter 9 bankruptcy. i know jeb bush argued for that with an interview with you. it's unclear, though whether that will come to pass. >> what happened if tomorrow that payment is not, you know given? what are the real repercussions of that for the people in puerto rico? >> immediately, some people will declare the pfc, the public finance korgzcorporation to be in default. what will happen is investors in the bonds, which is a lot of local puerto ricans some credit unions, will not get paid. it will be long time if ever until they do. the hope is there will be some sort of restructuring agreement where essentially the incestvestors get something back they get something for their i