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If it's a correction, what

was the mistake? World markets

tumble, spooked by Eurozone

debt and a weakened US Right

now there is no question that

"You investors have basically said,

me out of the trap." The

special report from

drought-starved Somalia where a

trickle of food starts to

extremely limited. People are arrive. What's on offer is

stopping by, but then moving

on. Liberal Party tensions

played out via letters to the editor. Honestly, there are

bigger issues confronting

Australia than the Australian letters page. And staying

connected 24/7 - smart phones

taking over our lives. Maybe even

even when I'm on the toilet.

You're kidding me?

Hello and welcome to ABC News

across Australia. I'm Ros

Childs. There is plenty of fear

and loathing on world markets

today. Stock markets here and

in Asia are plunging and

they've been taking their lead

from Europe and the US where

the twin nightmare of

continental de fault are really

biting. Martin Lakos and Alan

Kohler are standing by.

what are the reasons behind

this latest meltdown. Ros, good

afternoon, certainly increased

risks and perception that the

European debt issue will escalate really in regards to

Italy which has been brought

into the picture now. Italy has a much than Greece and has a larger economy so potentially has a

way of working its way through.

Per capital ta, largest levels

of hard assets, twice greater

than the US and certainly

greater than individuals in

Germany. So potentially one way

out is for the Italians to put

a one-off wealth tax onto the

Italians to basically raise

some money to assist in their

ability to pay off debt. At the

end of the day you've still got the European Union who has

clearly made moves already clearly made moves already by

setting up its mini IMF fund to

support these sorts of issues and

and we think the EU will not

allow Italy to go to a default

position but work with them to service their levels. Let's

take a deep look at the damage.

Here the All Ordinaries is down

200 points N Japan, the Nikkei

is giving up almost 340 points

and the dollar is off 3 cents

was today's trigger. Wall

Street lost over 500 points

this morning, the worst one-day

fall in two years. The fall in two years. The FTSE in

London shed nearly 3.5% and oil

is down over 6% in 24 hours.

Close tore home, Martin Lakos,

which sectors are feeling the

most pain here on our

these volatile sell-offs, markets? Ros, typically in

pretty much broad brush, but

the defensive sectors are doing better, so

Coca-Cola and Telstra, but no

doubt that those stocks or

companies or stocks with global leverage are hit hard so leverage are hit hard so energy

stocks. Rio came out strong

yesterday and increasing a

share buyback. At this point in

time market, investors or

traders not really wanting to

take a step back and look at

fundamentals, clearly looking

at the risks and we're seeing

that at other assets as well,

so hence sell-offs in

currencies and other commodities as well. How do

today's falls here compare to

what happened in 2008 when the

GFC hit? This is without a

large fall but you have to put

it in perspective that the

market has taken into a lot of

account and discounted what's

been going on through the Japanese tsunami right through

the sovereign debt issues in

Europe and slowing of growth in

the US, so a lot of bad news is

factored in but there is a perception that increasing. Martin Lakos, thank perception that risks are

you. Thanks, Ros. Let's head to

the streets where ABC reporter

Nick Dole has been taking the financial pulse Even before the

markets opened today there was

a lot of trepidation about what

would happen. The would happen. The futures index were pointing to losses of

close to 4% and it didn't take

long for the boards to turn red

taking with mining and banking stocks

taking major hits. We were here

for the open and a few

investors did stick their heads investors did stick

in to see that red on the

board. One man was capturing

Some people said, yes, it was a history through his camera.

terrible day for the mats things would get better for terrible day for the mats but

those who had the courage to stay put.

Well, it's a bit scary at the

present moment, but I think it

will turn around and be a run

on the markets for a while and

turn around over in America, I

little bit scary. You won't be think. But at the moment a

surprised if it goes another 2%

or goes up another 4%, so kind

of normal. I think it might be

a new norm. The world

survive, but the world has to

radically change. You cannot

keep pumping money into people,

into a black hole. So there is

still some optimism among

investors here in Australia.

Regardless, though, it will be

a very rough ride for those in

Dole there. the stock market today. Nick

fears are growing that we could be heading to another global

financial crisis. Let's see if

that's Alan Kohler's view. Is

he the host of 'Inside Business' and joins us now from

Melbourne. Is this the start of

GFC 2 Well, could well be.

Certainly the markets are

concerned about a recession in

guess the US and in particular I

guess the prospect of a global

recession coming out of the US.

So, to that extent, that's what it's

it's about. Remember that the

GFC in 2008 was basically credit crisis that turned into

a recession that was caused by the credit squeeze that

occurred. At this stage it

isn't a credit squeeze, but the isn't a credit squeeze,

problem in Europe is the fear

that that's what will happen if

Italy defaults or if Spain gets

into trouble, that there will be a credit squeeze caused in

the same way as what occurred

in 2008 when Lehman Brothers

went broke. So kind of two

different things going on.

There is fear of a credit

crisis caused in

the mere certainty really of a

recession in the US and I get

the credit crisis issue the credit crisis issue about

Europe is just about how deep

will the recession in the US

be. Is there anything out there

on the horizon that can change

this mood of doom and

gloom? Well, a lot of talk now

about what's called Q E3. QE

stands for quantitative easing

which is basically the Federal

Reserve of the US printing

money. We had QE the end of last year, earlier

this year, money being printed,

flooded into the markets. Now

there is a suggestion there is a suggestion that the

Fed will have to do Q E3, more

money printing, more money

dropping from helicopters,

trying to get the economies

going again. I think that's

about it. The only thing they

can do is print more dough. We

are seeing sharp falls here in

our markets but how much are

our fortunes tied to our fortunes tied to what's happening in Wall Street Europe? To a certain extent

can't we run our own race

here? Not in the share markets. When investors When investors do something, it

happens all over the world. In

fact, our market tends to perform worse than Wall Street

because of what's going on with

the dollar as well. The dollar

- the moo. In the dollar today

is extraordinary. It's all

about people just wanting to get risk out portfolios. Investors just

wanting to reduce risk. The

truth is we are obviously tide

to China. We're much more

interested in what's going on

in China these days than Europe

and US, but the market is just one market. Alan Kohler, thank you. Pleasure. Treasurer Wayne

Swan is doing his best to inspire confidence amongst

consumers and investors. He

says the falls on the market

mainly reflect global never forget that our never forget that our economic credentials are among the

strongest in the developed

world and that Australia has a

proven track record of dealing with global economic

uncertainty, and there is just

a world of difference between the

the situation in Australia and

the situation in Europe and the

United States. For example, in the United States, unemployment

is almost twice the level of Australia. To other news now. A simmering feud between Malcolm

Turnbull and a former Liberal

who helped bring him down as

leader has erupted again. Nick

Minchin has written a

cast gaiting Mr Turnbull as a

man who is seeking to blame

others for the collapse of his

leadership. At least one senior

frontbencher has criticised Mr

Minchin forgoing public,

describing the letter as

unhelpful. At an organic unhelpful. At an organic expo in Sydney, Malcolm Turnbull was

taking a keen interest in all things clean and green. The big

issue, isn't issue, isn't it. Yes, and it

is a hot issue locally. So is

his stormy past with rival Conservatives in the Liberal

Party. The man who helped topple

topple him as topple him as leader, Nick

Minchin, has now retired, but

not from political commentary.

In a scathing letter to 'The Australian' he says Mr Turnbull

is a man who can't get over

losing the Liberal leadership

in 2009 and is desperate for

someone to blame for taking it

away from him, and Turnbull has

only himself to blame for leadership of the Liberal

Party." All you want to talk about is gossip in 'The Australian' letters page.

Honestly there are bigger issues confronting issues confronting Australia than 'The Australian' letters page. So, that's it. He seems

reluctant to talk, yet Mr

Turnbull had posted his

whereabouts online and was

prepared to repeat his comments outside. What's your response

There are more important things

to focus on than the letters page of 'The Turnbull-Minchin spat confirms

the enduring bitterness from

the Liberals' 2009 policy

switch on emissions trading and the ongoing divisions

Conservatives and moderates.

It's more than an anowance,

though. Joe Hockey for one

though. Joe Hockey for one is

publicly ex-as per rated that

the pair are still trading

blows I think Mr Minchin is

entitled to his opinion, but

it's not particularly helpful. Should he not have

written the letter? I don't

private citizen. He can do what

he wants. The aking leaders are trying to smooth the waters for

Mr Turnbull He is doing a fantastic job And communicating

openly. The first food aid has

start add riving in Somalia

where more than 29,000 children

have already died from famine.

International agencies are

struggling to find ways to feed

people in one of the most

dangerous parts of the world.

Africa correspondent Ginny Stein reports southern Somalia. Southern

Somalia has been a no-go zone

for years, but al-Shabaab

militants were routed out of

here a few months ago and the

town of Dobley is now under the control of government forces. The first international

agencies are making their first tentative steps into providing

help where it's needed most.

UNICEF is funding a local organisation to carry out a

feeding program. We feed them

for five days and tell them

where to get assistance. Even

themselves are proceeding

because they know that they can

get higher on the other side. A

thick grul is what's on offer,

but that's more than what most

people have had for weeks. Many

of the children who arrive here

are showing worrying signs of

malnourishment. The suffering

experienced by so many seems to have no end

TRANSLATION: It was a difficult journey. There was nowhere

protected to sleep. The

children just lay down under

the bush. A lie on came and

attacked them. They were dead

on the spot. This woman fled

the famine with her husband and

8 children but he died on the way.

TRANSLATION: There was fighting going on there. I didn't have

anything and I didn't want to

stay there. I will go anywhere

to get a place to stay. There

are old people who are very weak. There

are weak and still we have the community who feel that also

for them the drought is affecting them and they need

also to be included in the rations. Getting food to the

people of Somalia remains the

greatest challenge. This is one

of three feeding centres that

has just opened but what's on

offer is extremely limited.

People are stopping by, but

then moving on. As UNICEF delegation prepares to leave, shots are fired. Government

to stop women fighting in front

of the feeding centre. There has been a new twist to the

riddle of life on Mars.

Scientists have found the most

compelling evidence of flowing

water there. It's in the form

of dark lines running from

craters on the Red Planet

detected about I a NASA Mars

orbiter, more pronounced during the warm season What makes

these new observations so interesting is that they occur

at much lower latitudes where the temperatures are much

warmer and where it's actually

possible for liquid water to exist. The most plausible

explanation is saltwater which

would increase the chances of

life on one of Earth's closest

neighbours. Financial doom and

gloom in America hasn't made it

the best of days for a

President to turn 50. Barack

Obama celebrated his birthday quietly with family and friends, as North correspondent Craig McMurtrie reports. A marching band

marked the occasion outside the

White House. Inside staffers toasted Barack Obama and

America's First Family hosted a

private birthday party. (Sings)

happy birthday... #

In Chicago a huge crowd turned

out for a birthday fundraising

and the President seemed to revel in escaping

Washington. Whae I said change

we can believe in, I didn't say change we can tomorrow. Not change we can

believe in next week, we knew this was going to take

time. Campaign volunteers were relieved to see relieved to see the old spark. He hasn't been as

motivated as he had in the

past. Today was awesome. He was

very energised, the old Obama I

knew. He is noticeably greyer

now. Little wonder why - more

grim economic news dropped just

in time for his 50th. Away from today's Wall Street plunge,

other figures show a record

number of US households relying on government

assistance to buy food. In May,

a whopping 46 million Americans

used food stamps. used food stamps. Another weak US jobs report is due

tomorrow. The economy is almost

dead in the water. Our growth

rate for the first half of the

year was just 8-10ths of year was just 8-10ths of 1%.

We're barely creating jobs,

unemployment is going up, not

down, and it's hard to see how that turns around at the

moment. His approval rate

something down to 42%.

voters is dropping, too, and the poor economy gives his

political opponents plenty of ammunition. We can't afford 4 more years of Barack

Obama. Barack Obama is one

50-year-old who can't afford a midlife crisis. Fresh

uncertainty hangs over the

future of Tiger Airways after

another extension to a ban on its domestic Tiger's local fleet has been

grounded since early July

because of safety concerns.

That suspension was due to

expire overnight but the Civil

Aviation Safety Authority says

it will apply

Court for an extension. It

argues that a major

deficiencies in the airline's

paperwork and there are still many issues to work through. Tiger Australia yesterday

posted a first-quarter loss of

almost $18 million. Trading in the timber company Gunns has

been suspended. More than 30 million

hands before the company requested a two-day trading

halt yesterday. It halt yesterday. It cited potential implications from Tasmania's

Tasmania's $276 million forest

peace deal which is due to be finalised on Sunday. It really

does depend on, for Gunns now

what happens with the pulp

mill. Gunns' shares have

slumped to their lowest value

in 30 years. They're worth

about 20 cents after $38

million was wiped off the timber past two days. There is some speculation obviously around

the company's cash flow and its

ongoing financial

position. Gunns is seeking $106 million

compensation for handing back

its native wood supply

contracts. Once upon a time

there were phones that just

made phone calls. Now smart

phones seem to be taking over

our lives. A British survey has

found that a third of adults and

and the majority of teenagers describe themselves as highly addicted

the point that they're taken just about everywhere. (Phone rings) Meet the Ramsdens, a

smart phone family. Olly never

stops texting, whilst mum

Natasha likes to stay online.

This technology has changed the

way they live They are really

addictive. I can sit there

playing games, Google,

FaceBook, things you would

usually have

computer for and now it's by my

hands, so easy to pick up and

use. And where this 14-year-old

goes, his smart phone goes,

too, even in here. But Ollie

isn't alone. Nearly half of all 12-15-year-olds who have a

smart phone use it in the

bathroom. And these devices

aren't easy to put down.

Today's survey showed that 23%

of adults with smart phones use

them at meal times, but at cost to our manners? This pocket-sized computer appears to be changing the rules. More

than a third of adults think

they are highly addicted to

their smart phones, according

to the study, and the figure is

far higher for teenagers. Young

people are particularly heavy

users of both social network

sites and media such as text

messages. There is no evidence as such that it's detracting

from their from their off line life, but

there is also evidence that

it's enhancing it. - but there

is also no evidence that it's

enhancing it. That may the smart phone is proving

essential to people's daily

lives and sales are soaring. To the

the markets now with Sue Lannin. How bad is the damage

here? Well, as we heard before,

Ros, investors are very

worried. We saw the broader

market fall nearly 5% in fact

in early trade, so we've not

seen those one-day falls since the global

financial crisis, and there is

a sea of red just about across

the board. The All Ordinaries index has lost 4.2% or 169 points. It's at 4169. points. It's at 4169. The

benchmark index, the ASX200 is

down 4% or 173 points to 4104,

and, Ros, it fell as low as

4088 this morning. Sue, which

individual stocks are feeling

the most pain? As we heard from the most

Martin Lakos earlier, the

energy index is certainly

hard-hit because of the fall in

the price of oil, so Woodside Petroleum is down around 6%,

so, too, is Santos, but

Macquarie Bank, the big

investment bank lost nearly 10%

of its value in early trade. It

fell to $22.20 this morning.

Now down about 8%, and we saw

the big miners fall, Rio Tinto

off more than 5% Billiton has lost more than 7%. Also consumer stocks like David Jones are taking a hit as well.

David Jones is off more than 7%. Also, 7%. Also, Sue, the Reserve Bank

has cut its forecast for

economic growth? Yes, amid all

this global turmoil, so the

Reserve Bank says there are

increasing risks for global

economic growth, so it's cut

its forecast for economic its forecast for

growth this year, but it has

raised its expectation s for

now at the market's other big inflation. Let's take a look

movers in the ASX top 100: It's

all down:

Back to those Wall Street

numbers and as we've said, they

are pretty ugly:

Officers from Queensland's

Environment Department have

raided the home of a Gold Coast woman who has been using an air

horn to try to move on a colony

of flying foxes in her

backyard. Robyn Burgess says

she was forced to take matters into her own hands after

thousands of bats took up

says they're noisy, smelly and residence on her property. She

now she is worried about the

potentially deadly Hendra

virus. People are very, very

concerned about the disease

aspect of them. None much us

- None of us know how many or

what percentage of them have

the Hendra virus. None of us

know how many of them lyssavirus. The Environment Department is deciding whether to take legal action over the protected bats. think they might know how to

stop many viruses and bacteria

infecting and spreading in the body. They've identified

molecules they've called pit

stops which prevent

multiplying or stops them gets

into the body altogether. The

work by Australian and German

scientists opens the window to

a whole new range of drugs to

treat conditions like cancer,

of eplycy and HIV. Pro Phil is one

of the co-author s of this

study. What we found is a way

to control how cells in our

body let things in and out. So,

cells normally have a barrier.

The wall of the cell - you

don't want to let bad things

into a cell, but a cell needs

to choose things it wants to

let in, like knew tri-ets and hormones and the signaling

molecules that a cell is

waiting for, and it does this by creating of the cell. And that's created

by a protein that is sitting

inside the cell all the time,

waiting for the signal to create these pits and that protein is called klorathrin

which we've found a way to control the activity of it, can

shut it down and that can

control and stop the process of pit formation and that turns

out to be extremely important

for the future of developing

new drugs for treating diseases. This research sounds

as if it could have a massive

impact on stopping a disease in

its tracks by developing those

new drugs or even preventing a condition developing in the first place. How excited are

you by it? Well, we're very

excited, I can tell you that,

but the fact that we're able to

use them to stop diseases from

hijacking this process to

infect cells is really

amazing. And how far down the

track is the development of new

drugs on drugs on the back of this new

work? Where we're at, at the

moment, is we know they work

and we know they work in a cell

culture situation in laboratory. They stop HIC, for

example, that's one virus, stop

it is completely from getting

into cells in the lab, but as

you can imagine, it is a long

way from the lab to treating a

human. What we have to do is

find out if these sorts of

compounds are safe in humans.

We don't want, for example, to

accidentally be causing failure or kidney failure as a

side effect. So the drugs have

to be finetuned until they are

drugs and that takes a few

years and that's the process we're getting onto

next. Professor Phil Robinson,

thank you Thanks very much,

Ros. It has been great to talk

to you. Australian Adam Scott

leads the World golf

Championship in Ohio. Darren

Clarke finished 7 over with the

highlight coming on the 8th. COMMENTATOR: Excuse me! Scott

had Tiger Woods' former caddie

Steve Williams on his bag. He

birdied four of his last six

holes to finish 8 under par

with a one-shot lead. Woods had

three birdies in his opening

round and is 2 under. Next

Tuesday is census night, but

census collectors have already

begun the painstaking task of

visiting every home in remote

north western Australia and for

several hundred of them the

trek is particularly time-consuming. It is way from Canberra to the

community of Mardiwah Loop near

Halls Creek in the Halls Creek in the central

Kimberley but the census collectors will be every door. Their aim is to

record the age, income, beliefs

of every Australian.S That a tough task in the north where

tourists crisscross the

highways and itinerant Aboriginal people move between

communities. It's tourist

season, so lots of other

people. The dispersal of people

out in the communities is very difficult. houses is an issue. The Bureau

of Statistics says that the

last count in 2006 was

inaccurate because it missed some Aborigines, tourists and

miners. It's estimated the

population of some shires was

undercounted by as much as 10% For not only funding

purposes but for strategic

planning, it's all based on the

ABS figures and if they're

flawed than the whole process

is flawed. An extra $20 million

has been allocated to year's count to try to audit the Top End more accurately.

Census counters are already

working their way through the

region and extra officers region and extra officers are confident that the extra effort

will pay off The extra resources are certainly paying off and we're confident depth

we will have an accurate account

account for the 2011 census. The focus in the Top

End has been to recruit locals

who know the area and the who know the area and the

people. Yes, I thought it would

be a good thing to be a local

and get involved to the census count and maybe see

positive things come out of positive things come out of it for Halls Creek. Census forms

have already been distributed

to about half of Australian

homes and are due to be

collected by the end of the

month. To the weather now. The

satellite shows a cloud band crossing parts of South

Australia, Victoria and New

South Wales, patchy low cloud

moving over the Queensland

coast, and mostly clear skies

in the west under a high. A low should generate showers should generate showers and storms across

falls over the New South Wales

ranges. A Tasman high should

weaken allows winds and showers

to ease on the Queensland

coast. A front approaching the south-west should trigger

showers. Around the capitals:

And back to those markets

now. As we've said, big falls

everywhere today. The All

Ordinaries was down 200 points

when we started the bulletin.

It's now come back a

182. Japan's market is also

tracking that plunge on Wall

Street and the dollar is at

104.94 US cents. That's the

news for now. I'm Ross Childs.

Have a good afternoon and a

great weekend. See you Monday.

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