>> from bloomberg world headquarters in new york, this is "bottom line." today the number of people killed by gm technicians which is maybe much higher than initially estimated. how scotland's independent voters may affect the biggest industries. how now maybe the time to invest in vintage watches. to our viewers in the united states and those of you joining from around the world, welcome. full coverage of the stocks and

stories making headlines today. peter cook looks at congress vote on president obama plan to militants.ic state the scotland referendum on the biggest industries. the latest on the gm compensation claims. we begin with the compensation representative kenneth feinberg. it shows the total number of people killed by the ignition switch is maybe higher than initial estimates. so far 19 death claims have been claimed eligible for compensation while gm had counted 13. we spoke with him earlier today and began with its gm got it wrong. >> no, gm applied a different and are. gm was looking at engineers and asking engineers, can you definitively say it ignition switch defect caused the

accident? our standard is much more liberal, much easier to apply, a legal standard. was the defective ignition cause, ae proximate substantial likelihood as the cause of the accident. that is one reason there is a discrepancy and also remember under the program i am administering, passengers are eligible, passengers of other vehicles. some estimates suggest they need as much as 1.5 billion. where do you see the numbers falling? >> we will see. we are just now beginning to make the dollar house galatians. once we make the dollar calculations, we have to then see whether the claimant, the victim or his or her family will

accept a money so it is a little to be putting dollar signs next to eligible claimants. we will know more about that in the next four to six weeks. >> this fund is limited to the original february recall of two point 6 million vehicles. as people have been writing in, and to you get a sense they may need to extend and broaden the criteria, the eligible vehicles and will they need to hire you back again? >> that is up to gm. we have seen the number of inquiries. esther fienberg, i lost my daughter live in an automobile accident in the gm car, and ignition switch. if it is not an eligible vehicle listed on the gm protocol, no point applying. there are criteria and only those criteria at the current time determine my jurisdiction to award ahlers in damages.

>> do you suspect the number is substantial enough that you may need to suggest to give it a second look? >> i would never system -- i to gm.ever suggest that my jurisdiction to compensate is determined by others. i can only do when i am asked to do. gm will ultimately have to decide going forward whether it is comfortable with the protocol, whether it should be expanded to other vehicles. that is completely gm call. >> my colleague joins me now from washington with more. we did not give specific thick dumb payout information but did he hint of what may be to come? -- we did hear from him about specific payout information in four to six weeks. a andd between track track the payout information, ,rack a being clear-cut

something that determines the age, earnings potential and then specific economic considerations, fienberg sees the split us 40% track a, 60% track be. they want the claims and tie out considered on a case-by-case basis. he credited that to the lawyers now involved. turning now to europe as the people of scotland prepare to vote on independence this week, many questions about what the vote could mean for the industries. >> it scottish residents vote to leave the united kingdom later this week and economy will fear -- barely be crucial for success. the energy industry will be one powerful element. the north sea would be split up with 96% of the oil output and

47% of the gas going to scotland. with oil production down, future revenues may struggle to cover promised social spending. oil giants have publicly stated they prefer the united kingdom to stay united. scotland financial sector or is also significant. 100,000 people managing more than 1 trillion and funds and generated more than 10 billion every year for the scottish economy. some of the oldest finance firms including rbs founded in 1727 and standard life started in 1825 have said they will move business south of the border if separatism becomes a certainty. industry was built around the country's imports and exports. you have most famous is whiskey. centuries-old distillery can hardly pick up and head south.

they worry the uncertainty surrounding an independent currency could impact competitiveness and supply chain. 109 distilleries sold $7 billion of whiskeys -- whiskey overseas. that makes it the second largest scottish exports after oil. joins me withx more. could be a lot of whiskey drinking depending on which way the vote goes. approaches, what are they saying about the future of industry in scotland? >> the prime minister is talking about the risk free separations being a dream. not much should of a trial a painful divorce. they been harping on the deep -- the idea that it will be harmful for many businesses. they have been looking at evidence of the potential disaster.

>> what do you cave business leaders say about this? >> they say they have heavy amounts of investments in scotland and will be difficult for them. people and tell tucker what will happen to specifically because they have not been sing because of tax incentives. of daysve a couple until the vote. what are the polls saying? been very difficult. not a great deal of pulling experience in the u.k.. >> we will continue to follow the story. more coverage as a vote approach is on the 18th of this week. thank you. coming up, leveraging junk bonds. whether it is approved and option for investors looking for higher yields. stay with us. we will continue in just a moment. ♪

>> stocks are mixed today following the first weekly loss for the dow and s&p in five weeks. bond yields near the highest in two months. it is all about the federal reserve this week. michael mckee says that make it worse for investors. >> what goes up must come down they say. looks like we are about to prove it. take a look at what has happened to volatility. is back and play. they will not raise rates wins civicnd will not be the about a timetable but they have to give us new economic forecast and have to give us the new rate map. when do they think rate's should rise and by how much? the new forecast suggest some time in july. bottom line, they will have to be more hawkish than that. of ratel start running room and that and already have.

>> when you say hawkish, what do you mean? >> they are going to move those thoughts. some members talking about an earlier move. the real question is whether the long-term docs come down? do they find the new neutral idea that the economy cannot grow all that fast? >> what do they say about it will likely be important to maintain the current target rate for a considerable time after the asset purchase program and its becausease program and it ends next month. >> we're also supposed to learn more about how they will raise rates when they do. >> we don't know for sure but that is the expectation. it would not be as our gift moving. they will get interest on excess reserves as the rate. fixed rate will be the bottom. this is a big deal but not as big for volatility.

michael mckee, thank you. junk bond investors looking for higher yields they want to try leveraging the bonds, at least that is the advice from analyst at citigroup. joining me is lisa abramowicz. thank you for coming on. why are debt investors using more leverage right now? >> look around. one reason they are considering guidance is they are concerned about how long the low rate environment has persisted and the complacency resulting from such a long amount of time. when you get the low rates people say we will not lower the target yield, we will just find new ways to get there. one of the ways is leverage. >> haven't they learned anything from 2008? outsecretary even pointed in a recent statement, this is the month anniversary of lehman.

had they not learned anything? >> i do not know who is the day -- they here. i think that is the question. pension tensions -- funds and retirees and a lot of people looking for a significant real rate of return that is difficult to get given the current environment. looking forward, if growth is not going to accelerate that much, and there are some people out there that have borrowed from the future to pay for today by getting so indebted that if that means growth will be slower, been the only way to get returns or not the only way but one of the ways is to engage in riskier practices such as incurring more leverage. >> what type of assets are they leveraging up into is doing this? >> citigroup analysts were talking about which assets are the best to leverage to get 10%

return, given how much leverage you would have to use and how much you would have to borrow in the short term to invest in longer-term assets? they found given the rate turn and risk on the model back in 2011 that high-yield bonds tend to give more reward for the risk. there are a lot of people who would disagree with that. a lot of people say it inherently they may be more risky because they have been among the biggest beneficiaries of the fed stimulus. >> how does leverage amplify returns and on the flipside, potentially losses as well. >> basically what you are doing is capturing the difference between long-term rates and short-term rates. investing longer-term was short-term borrowing. here are the problems. potentially if you have to pay assets, yourt-term may have to liquidate the longer-term assets if you are

unable to do so or able to do that at a huge asset. ok is the fed the potential roentgenology this? >> maybe in the short term. here is a theory, in the longer-term, regardless of what the fed can do -- with the fed removing the stimulus, it will reveal the underlying economy and just how strong it is. how long it can keep going and accelerating. the question is, if it can't, then we will be in the slow growth environment for a while. if it does accelerate, which is not the base case scenario, then wherean pose a problem you start getting the shorter-term rates that are rising. >> what does that mean for investor appetite for leverage? you would have a lot of

volatility and bond values and a lot of losses potentially. says they gross believe in the new neutral. they do not think growth will accelerate and think it is prudent to use leverage. they are focusing more on higher-rated instruments than junk bonds it seems. it seems like some of the biggest investors are saying we do not see a scenario in which road will accelerate that much. potentially that makes the system more fragile because you have more leverage and inherently risky bets hanging out there. >> are we at the end of the credit cycle? >> it is hard to say. it can persist for longer amounts of time. has created a financial stability group to examine where the potential bubbles are. they are clearly concerned about this and the vulnerabilities of merging the markets that results

from so many years of low volatility and low interest rates that do encourage them to the spur riskier investments and investing practices. >> what about the time of low volatility? is the public just saying the economic signals seem to be going forward, we seem to be getting all of this stuff behind us but is there still condition is? >> certainly. there is a question whether the low volatility and numbers lie the implied volatility? are is a question of whether it is real or whether there is a trickle that could end volatility. banksk there was the would be happier and they would be earning a lot more and so with the hedge funds. the question is how long it can go onand how long it can without volatility frankly. let's we will see you wednesday on the days. thank you so much. coming up, congress gets ready

to vote on president obama's plan to back islamic state militants. that story when we continue in just a moment. ♪

>> president obama's plan to take on the islamic state militants will take on it first passed in congress this week. peter cook to insmed me with more. is the president going to get the support he is looking for? >> right now looks like the president is likely going to get a vote this week on his plan to arm and train. of looks pretty clear based on the resolution of the house is planning to vote winner this week. it will come with strings attached. not the kind of strings that would make them oppose what the house is going to propose. specifically we're told the plan will require the department of defense to submit to congress 15 days before the syrian rebels lawmakers the plan to so they can review it. there will be a progress report every 90 days. the resolution will spell out no combat forces can be used on the to help in the effort with. rebels and other

conditions tied to the funding that impose stricter oversight on the part of congress over the proposal. at the end of the day looks pretty clear the president will get what he wants in terms of limited training and equipping rebels. there is a larger question whether they need to vote on broader authorization over the entire effort to take on the islamic state. that will likely get put in the lame-duck session of congress. you're hearing them say they do expect to cast that type of boat. , what about his efforts to build an international coalition to take on eifisil? >> the white house says it is coming along nicely in their words. 40 countries are pledging some sort of support to the effort. he said over the weekend there would be arab states that would

engage in airstrikes. there are other contributions for countries will make. the white house being very clear that they want to hear that from the countries and not announce it forward. >> peter cook, thank you. 26 minute past the hour. by.ia sterns standing the next day on wall street. >> it is a mixed day. the dow is in the green. the s&p in the red ever so slightly trading below 2000. that comethlook at down by more than one percent being dragged lower by some big names including tesla who shares are off by 9.5% and also facebook and activision. a couple of individual stocks we're watching. the first is at&t. news that american mobile has reached out as a potential suitor according to people with knowledge of the matter. hoping to appease regulators

over antitrust concerns. this could fetch as much as $17 billion. american mobile is carlos slim mexican conglomerate. we will be on the markets again and 30. ♪

>> welcome back to the second half-hour of "bottom line." i am mark crumpton. thank you for staying with us. su keenan has details. >> good afternoon. the energy rebound one of the big stories. west texas rebounding back on the weaker dollar. oil futures rising as much as just over half a percent on the lack of any bullish news. oil will continue to trade sideways. energy prices rose earlier on china economic crisis.

aaa reports gas prices. hurricane odiel the strongest to hit baja california and decades. a battle the mexican peninsula with high winds and rains. abos san lucasst some resort area. it is forecast to continue to weaken. >> change in direction for coffee and gold. >> coffee the winningest commodities so far. down this day. forecast for rain in brazil has coffee prices falling more than a percent. changed., gold little rebounding from an eight-month

low. a physical demand. the china shipments more than double. up to 39 million a year earlier. >> prices have been falling for the past five weeks. >> this is concern to raising interest rates. that is the big question of the week. >> su keenan with the commodities report. >> pre-orders for the iphone 6 and iphone 6 plus topped 4 million and pre-orders in the first 24 hours. deliveries will not start until the end of the week until the phone officially goes on sale. demand is already outpacing supply. >> these are the latest and best iphones we have ever done. i think you will agree. >> this is my iphone.

this is the iphone 6. this is the best phone we have ever done, the thinnest. this green screen is to die for. .t is super fast lightning fast. whole new range of wireless technology. screaming fast on the wireless networks. really unbelievable and feels unbelievable in your hand. hold it. it is really unbelievable. teamesign, johnny and his did an incredible job. it is really seamless in the glass like a singular form. back to what is next. this represents a continuation of the iphone. >> leap frog i would say. it is not the first iphone. it is the biggest advancement ever and iphone history.

so we think the upgrade cycle here in the number of people that will switch from other smart phones, it will be in norma's. >> were you challenged by what samsung does and has in the development of this size personal smartphone? >> know, we could have done a larger iphone it has never been just about making a larger phone but making of that are found in every single way. so we shipped things when they are ready. the display technology here, the battery technology -- everything else and the software, you can still use it one-handed because you can tap it twice and the screen will come down. so the ingenuity here and the fact that we have integrated

hardware services, which i think only apple can do, it now is the time for it. like mr. cook also address security concerns over apple pay, the new feature that uses sensors to let people pay for goods and services by swiping the smartphone. >> our system is much more secure than the traditional credit system is. they do love their card. we are not doing what other companies are doing. you aret know where buying it. we do not want to collect the stuff on charlie. i do not want to know where you're spending your nights. so we firewall all of it but we do not keep it. it is on our servers. great and what is fixed what was not. >> you can watch the full interview with apple ceo, tim cook, on charlie rose tonight at

8:00 and 10:00 new york time. staying on cyber security, lokket lokken -- elliott talks about the rise in cyber attacks on the best way to deal with them. tothe best idea is immediately report it. and to ask security engineers. >> the revenues are about 60 million. is there in a noticeable impact >> it is you expect?

about five percent year-over-year. this is getting to be more and more of an issue. >> everything is going in the cloud. you have to make payments. the new iphone. more and more opportunities for hackers and more and more opportunities for business like yours? >> unfortunately. we expect to see more and more tax. is a safe time for mobile users. and we are expecting more. i expect maybe a smart tv. fortunately what we see is

traditional crime. the engineer support traditional crime. such as kidnapping. >> of next, continuing coverage of the story su keenan was telling us about. the hurricane slams into a mexican resort. the latest on the damage coming up in the latin america report. ♪

>> time for today's latin america report. we begin in brazil where the currency dropped for a sixth

straight day, the longest stretch of losses since august 2013 as investors consider the prospect or reelection of the president. the latest polls show him running neck and neck with former environmental minister. brazil fell into a recession in the first half of the year. odiele has weakened slightly after slamming into the gulf coast of mexico. it went on shore with category three hurricane winds. more than 200,000 people lost power and hotels in vehicles were damaged. now it is a category two hurricane and expected to continue to weaken over the next 48 hours. andrise of smart phones tablets have given birth to a booming industry of high-tech accessories. asterisk the sale of premium headphones exceeded $1 billion. experts say the market will

continue to grow this year. a new holliday visited business raising the bar on earbuds. >> at this news story in new york city it is all about years -- ears. ♪ >> did you ever think you would talk about ears this much? >> i never thought i would look at them this much. i also never really knew right and left could be so different and family ears could be so different. >> those defenses are what gave her the idea to start a company called normal. >> it is normal one-size-fits-all and. >> using 3-d printer should take about a way to make and ship them that fit perfectly.

snap a few pictures and then choose your color scheme. built your buds, they are formed by engineers, molded i 3-d printers and sent through an assembly line for completion. to tackle three different things. the fit, customization and sound quality. lex on top of that, normal promises to ship every pair within 48 hours. headphones. just the potential of mass customization through 3-d printing of other goods is there and something we're thinking about for the future. >> when the buffalo bills play their home opener, they will be worked out the cheerleading squad for the first time since 1960 seven. the squad has been suspended because former cheerleaders are suing the team claiming wage

theft. >> when the buffalo bills play ther first home game of season september 14 against the miami dolphins they will be without their cheerleaders for the first time since 1967 because a half dozen cheerleaders are suing the team for wage theft. they are not alone. alsoincinnati bengals are being sued by cheerleaders claiming the team has pale to -- failed to pay minimum wage. cheerleaders say they will paid from $150 to zero dollars per game and often no practices for -- no paid for practices and appearances. nfl teams can get away with this because cheerleaders have been putting up with it for years. second, teams claim cheerleaders are either seasonal workers or independent contractor others

who under federal law are not entitled to minimum wage. these lawsuits could mean the end of the nfl cheerleader. the nfl has an annual revenue of 9.2 billion so doesn't -- doesn't make sense to pay >>eline performer so little? the lowest paid player on the team gets $420,000. to pay every turn later $10 per hour would take $7.6 million, less than a fifth of the 44 million the nfl commissioner took him in 2012. according to analyst, cure leaders appear on average for seven seconds per game. it is worth a .2 5 million per season. with those numbers minimum wage does not seem so much to ask. to invest inime wristwatches? we will hear from an expert and

we continue in a moment. ♪

>> welcome back. line" onbottom bloomberg television. building watches takes research and time. where to begin? steve coble has advice on how to get the best return on your timepiece. -- we are essential watch. we handle the finest brands. we have the best appointment. we are the behind-the-scenes place for a lot of major watch companies. become,today have especially on the secondhand market, the billion dollar industry. building a portfolio of watches.

>> this watch is hot because it is the original look. the original design. it is the pilot's watch. something that can shoot up when things start to really disappear from the market. you can see a nice rate of return on their. this would be apple stock. it will continually go up. this will grow in value no matter what. the omega brand is your ibm of stocks -- of watches. a company growing over the years. you do not see a lot of these. i would not be in 10 years if this was an $8,500 watch. this is the bond you hold forever. even during the recession time. this was the one brands you did not see fall apart.

a little bit more money to get into but bigger investment brings a bigger return. >> another check of the market movers is on the other side of the break. another mixed day on wall street with the dow jones up nearly 50 points. s&p and nasdaq lower. we continue in a moment. ♪

>> get the latest headlines at the top of the hour on bloomberg radio and that bloomberg.com. that doesn't for this edition of "bottom line." -- that does it. it is 56 minutes past our which means bloomberg television is on the markets. i am olivia sterns and we are about an hour from the close. the s&p has recovered some of the early losses and pretty much flat. the nasdaq still down by one percent. being dragged down by big momentum name intech, in

particular tesla. seeing a big selloff in the likes of twitter and pasted -- trip advisor. for more on the market and what we can expect later this week, i am joined by president and ceo of the philadelphia trust company. in the breakng about when you expect to see a correction. >> geopolitical. they are concerned. they are concerns but not problems. i am surprised some of them have not become problems because for me, a lot of them are problematic. they problems could happen later this week with scotland. it could be problematic for the market. the market may stand up and take notice. i think any correction to come because of the geopolitical issue. >> you think is context -- scottish succession vote will

have a big effect on the u.s. economy? >> yes because it is a domino effect. start toself may unravel and the market may proceed whether it will unravel. if that happens, it will come through the market. it could be a huge flight to quality. along with the dollar strength we might see an equity market rally. it is a little dicey, but i think it could go either way. >> geopolitical risk. yellen has guided very carefully. >> short-term interest rates will stay well anyway. >> s&p up by 7.5%. where do you think we end the year? >> i think we make it to 10. we may have a little problem but it the and then

houses in the senate i think we will have a good rally. industrials, technology, domestic energy and financials. broad mix.ad miss -- >> with tapering coming and longer-term 10 year in interest rates probably going up because of the taper, banks will be able to make more money. >> you said rates will stay low for a while. like short-term rates. >> long-term rates will begin to move up. >> look at where the long-term end of the curve is now. >> financials have not participated in the move this year. i think if we start to see even incremental increases, financials will begin to participate and play catch-up. >> perhaps they're done hanging the billion dollar fines. cranes, software and thinking. >> i think they will have to

spend off. , the storage business valued at a very low level. the battle unlock the value. the food services business along with the crane business. the crane businesses week. they will cement off the food business. there were activists agitating for that right now. i think that happens. great footprint. very strong management. they will get taken over. >> thank you so much as always. our crofton at head the philadelphia trust. >> welcome to the most important hour of the session. 60 minutes left for the closing bell. today