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Live. Tonight - global share

markets in freefall as economic

gloom spreads. We will have to radically

radically change. You cannot

It is a black hole. Australian keep pumping money into people.

shares plunge more than 4%

after a nightmare on Wall

Street. The teen at the end

centre of an extortion plot praised for her bravery. How

are you feeling? I'm okay

thanks. Good evening and

welcome to ABC News, I'm

Virginia Haussegger. If you

thought the global financial

crisis has tough brace

yourself. The local share

market has sustained its worst

one-day loss in two years. That comes on

Street's biggest sell-off in

nearly three years and steep

falls across Europe. Investors

fears about a global recession fled the markets in droves as

gained momentum. Some economists say Australia won't

be able to escape it this time

around. Taking a look at the

damage here the All Ordinaries

plunged more than 4%. It's now

dropped 17% since mid-April.

The benchmark ASX 200 shed 4%

today while the Australian dollar

dollar has now fallen

US. With a closer look at

today's massive losses here is

Brigid Glanville. As investors

story. Australia followed the fled the sea of red told the

fear and panic that hit the world's financial markets. This

is probably the worst down day

in probably two years post GFC,

without a doubt. It is a big

day in terms of volume as well,

over $9 billion worth of turnover. The United States and

European markets led the massive sell-off. Debt concerns saw the main all the gains it made this

year. Investors are selling

ahead of the July jobs report, which many people believe will

be a lock weaker than what the consensus is expecting right

now at about 90 to - 90,000

jobs. Europe has its own debt

worries. Germany's Dax and

London's FTSE head their worst

day this year closing 3 bvrnt

5% lor. It comes as the

European Commission President

gave a warning that last

enough to stop month's rescue pack aage is not

heading into a recession. We

are facing two problems in the

eurozone. First of all policy

is not able to lead in this

confusing financial market.

That is the main problem. The That is the main

other problem is we have still

Greece for Portugal, or no perspective for Spain, for

Ireland. Australia can't escape

Europe's pain. We know that the

financial sector links a much

more important through Europe

and the US. That impacts upon

confidence and upon wealth. The

growth Reserve Bank has slashed its

and there's growing pressure on

the bank to drop interest

rates. They cannot conceive of putting up interest rates while the international situation,

the global debt problems, are

so great. In 2008 chien's

demand for the country's resources helped Australia

escape the worst of the global financial

financial crisis but economists

say things are very different

this time round. China Reece

two largest customers are the

US and a Europe. If those

economies collapse then the

Chinese demand for Australian

fall and this time around

there's no money left to

bailout struggling economies.

The Treasurer says Australia is feeling an #i78 pact but is well placed to ride out the

volatility. All of these factors mean our economic credentials and fundamentals

are strong. But it's clear that

confidence is no longer strong. Markets across Europe have

just started a new trading day

and stocks are tumbling yet

again. Our correspondent has London. These are the headlines filed this update from

traders saw as they came into

work today. Panic rips through

global markets and don't look down. Yesterday more than $2

trillion was wiped off stock

markets around the globe and

everybody is wondering is that

going to happen again today? So

far in London markets are down

again but the real number

people are going to be looking

for is the US jobless figure

expected around midday London

time. If that number is worse

be more than people expect there could

the markets. Many people are

wondering how did we get here?

It was just over two weeks ago

eurozone leaders met to have a

crisis meeting and decided to

put aside a fund of $600 billion to back up countries

like Greece. The markets and

analysts say that has not been

enough to reassure financial

markets. Now Alan Kohler takes

a closer look at the reasons

behind the slump. Let's be

clear, markets crashed today

not because of the

deteriorating US economy but mainly because of

risk of credit crisis mark 2.

Mainly caused by Italy. Unlike

Greece Italy is not insolvent

at this point, even though has almost as much debt but it could run out of money and

default if a financial market panic means it cannot borrow anymore. That seems to be

beginning. The amounts involved

in an Italian debt crisis would

be much larger than Greece and

at the moment the European

stability fund that bailed out

Greece does not have enough

money in it for Italy. In 2008

weeks after Lehman Brothers the share market crashed two

went bust when it seemed

Congress was not going to bail

out the banks. Investors were

too blah say. This time they

are panicking too early. If

they don't act 2008 will seem

like a pin nick. I'll be back

later in the bulletin with a

details of what happened

today. The US President turned

50 today but America's

financial woes took a bit of

shine off the celebrations.

Barack Obama spent the day with

managed to fit in family and friends and also

campaigning. Craig McMurtrie managed to fit in some

reports. A marching band marked

the occasion outside the White

House. Inside staffers toasted

first Barack Obama and America's

first family hosted a private

birthday party. (Sings) #Happy birthday to

you. In Chicago a huge ground

turned out for a birthday

fundraiser and the President

seemed to revel in escaping

Washington. When I said change

we can believe in, I didn't say change we can believe in

tomorrow, not change we can

believe in next week, we knew

this was going to take time. Campaign volunteers

relieved to see the old spark. He hasn't been as

motivating as in the past,

today was awesome. He was very

energised like the Obama I

knew. He is noticeably greyer

now, little wonder why. More

economic news dropped in time

for his 50th. Away from the

Wall Street plunge other

figures show a record number of US house-year-olds are relying

on government assistance to buy

food. In May a whopping 46 million Americans 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

eight tenths of 1%. We are

barely creating jobs,

unemployment is going up, not

down. It is hard to see how

that turns around at the moment. His approval rating is

down to 42%, his standing with

independent voters is dropping too too and the poor economy gives

his political opponents plenty

of ammunition. We can't afford

four more year esof Barack

Obama. He is one 50-year-old who can't afford a midlife

crisis.

A French court has approved an

investigation into the new head of the International Monetary

Fund. It is alleged Christine

Lagarde abused her position

when she was the French financial - Finance Minister.

In 2008 she paid $380 million

compensation Bernard Tapie to settle a long

running legal dispute with a

state-owned bank. Mr Tapie is also a friend of French President, Nicolas Sarkozy.

Christine Lagarde denies Christine Lagarde denies any wrongdoing or any suggestion

she personally profited from

the settlement. Police say

they're already making progress

in their investigation into

this week's bomb scare on Sydney's North Shore.

Schoolgirl Madeleine Pulver is

back with her family in the

house where her ordeal took

place. The 18hold hours as police worked to

remove a device from around her

neck thought to be a bomb. Placed there by a masked

intruder. Life isn't quite to normal for Madeleine Pulver

but it's better than it was two

days ago. How are you feeling Maddie? I'm okay thank you. Her

father's relief at having his

family together and safe is

obvious. It was beautiful. It

was- the kids were a little

tender and ended up all six

mattresses in one room. But it

was very was very nice. The 18hold is

most grateful to Karen Lowden

the constable who sad with her

at the beginning of her

ordeal. She was quite distressed but held herself

with scuch composure. She was

so level headed and knew what she needed to do the get through that

situation. Constable Lowden

wore no protective clothing but

stayed with the terrified

teenager for three hours until

the bomb squad arrived. I can't

say I am any braver than any

other police officer. I did

know there was a girl who

needed help and

was getting to her. The police concede their investigation

faces a massive challenge. This

is the sort of crime we haven't seen in Australia before. There

are few clues, the main focus

is the note attached to the device placed around Madeleine

Pulver's neck. Forensic experts

say clues like this take time

to deliver results. It could

well be weeks. If the person's

fingerprints are on file and

they turn up fingerprints on

the document they might have somebody of next couple of days. This will

be a lengthy investigation but I

I can assure you from my discussions this morning with

the deputy and assistant

commissioner, they are certainly

they are on the track. The

Pulver's are one day closer to

life as normal. ACT police say

a sharp edged weapon like a

knife was used to attack a

27-year-old Canberra man who

was found dead yesterday morning. They say the

university graduate who was

born in home by bus from Melbourne. He

arrived at the Jolimont centre

at 4am and walked up Northbourne Avenue expecting to

be met by family who were coming from Gungahlin to pick

him up. His body was found three hours later outside

Braddon flats with severe head

injures. It was a very - you

know significant for eurosty in

this attack. It was quite

fierce. Police are sifting

through CCTV footage from the

Jolimont bus interchange and Braddon. Braddon. They say the man had

no police record. Malcolm

Turnbull's brushed off a blunt

rebuke from a former front

bench colleague. Nick Minchin

helped install Tony Abbott as

liberal leader. In a letter to

a newspaper he accused Mr Turnbull for desperately trying to blame others to blame others for the

collapse of his failed

leadership. All you want to

talk about the gossip in 'the Australian' letter's page.

There are bigger issues

confronting Australia than 'the Australian' letters page. That

to his opinion but I don't

think it is particularly

helpful. Should he a have nod

written the letter to the

newspaper? I don't think it

helps. He is a private citizen

and is entitled to do what he

wants. The acting Opposition leader backed Mr Turnbull. The Federal Government has been

accused of failing its humanity

over plans to send 13

unaccompanied children, child

asylum seekers to, to Malaysia

as part of the swap deal. It is understood the immigration department has chartered planes to fly the 55 men, women and children off

Christmas Island. The United Nations High Commissioner for

refugees says the Government

should not rush the assessment

process.

Immigration authorities were

on high alert as the 55 asylum

seekers spent their first night

in detention. It is understood

the group was upset and

disappointed when dealt the

news that their stay in

Australia would be short lived.

But pressure is mounting on Federal Government to relax its

hardline stance in relation to

the children in the group. 13

arrived unaccompanied. This is

a very vulnerable group of people people probably traumatised

already by the boat journey from south-east Asia to Australia and they must be

treated with the appropriate

level of care and support that

they need. The United Nations

is already responsible for more

than 1,000 unaccompanied

children in Malaysia. It is

urging the Government to carry out hour to report vulnerability tests on those

the conservative side of

politics are highly critical of

any move to offload children

overseas. I think it is

indefensible for Australia, prosperous country, to send

children by themselves to

another country. I think we are

failing in humanity in doing that. A delegation of police

from Malaysia touched down on

the island late on Thursday.

The officers will spend a week

observing the handling of the asylum seekers in Australia. I'm here to Australia. I'm here to be given some briefings on the

process of work and time to

opportunity to see the good

work that we've done. The

asylum seekers have all been

processed and are now awaiting

word on who will be sent to

Malaysia and when. It is understood the immigration department is planning to

transfer the asylum seekers in

two groups early next week. For

the first time international

aid agencies have put a figure

on the suffering in east Africa's drought and famine. More than 29,000 the age of 5 have died in the

past three months. Aid groups

are struggling to find ways to

feed the hungry in Somalia

which is considered one of the most dangerous parts of the world. From the world. From the country's south here is Africa correspondent

Ginny Stein. Southern Somalia

has been a no-go zone for years

but Al-Shabab militants were

routed out of here a few moss

ago and the tone of Dobely is not under the control of

government forces. The first international agencies

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 we

tell them to see where they can

get assistance. Even themselves are proceeding because they

know that the ref few guys come

here and can get high

assistance in the other side. A

thick gruel is what's on offer

but that is 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 a bush. A lion came and attacked them. They were dead

on the spot. Shafan Abdi fled

the famine with her husband and eight children but he died on

the way. There was fighting

going on there. I didn't have

anything and I didn't want to

get a place to stay. Getting

food to the people of Somalia

remains the greatest challenge. This This is one of three feeding

centres that has just opened

but what is on offer is

extremely limited. People are

stopping by but then moving on.

As the UNICEF delegation

prepares to leave shots are

fired. Government soldiers

shooting into the air to stop

women fighting in front of the feeding centre. Thailand's parliament has

elected the country's first female Prime Minister. Yingluck

Shinawatra will become the

country's 28th Prime

and is the first ever woman to

hold the position. Her

leadership was confirmed in a

parliamentary sitting this

morning. Yingluck will lead her Red Shirt-backed Pheu Thai

party which in Coalition with

five smaller parties holds 300

of the 500 seats. The future of

Tiger Airways is up in the air again following

extend the ban on its do mesic

operations. Tiger's domestic

fleet has been grounded since

early July amid safety

concerns. The suspension was

due to expire overnight but the

Civil Aviation Safety Authority

says there are significant

deficiencies in the airline's paperwork. A Federal Court

hearing has been adjourned

until next week but the ban

could be lifted sooner if they

meet the requirements. Over the

course of today Tiger did provide some manuals we were waiting on. We

are now assessing those. There

is a little bit more work to do

and more steps to be

taken. Tiger Australia has

posted a first quarter loss of

almost $18 million. To finance

now and the Australian dollar

had one of its biggest ever one-day falls. Local share

markets were down by more than

4%. The Reserve Bank cut its

economic growth forecast this

year from 4.25% to 3.25%. That

raises the chances of an interest rate year. Here is Alan Kohler again. I'll start with a few individual stocks because some

of these falls are truly

shocking. Rio Tinto, 6%, BHP 5%, Macquarie 5%, Macquarie Group more than

7%. OneSteel, 7%. David Jones

5.7%. It is easily the worst

carnage since October 2008 just after the

after the credit crisis reached

its climax with the collapse 06 investment bank Lehman Brothers. The All Ordinaries

index closed 4.2% lower at 4,169 which is its lowest point since July 2009 when he was

halfway through climbing out of

the 2008 crash. Energy, mining

and small caps did the worst

and the index futures contract

is currently betting on a

further fall of 4.5%. It's best

to look at the bond market to

get a sense of what's happening

and why. It is mainly fear over

Italy and Spain. The yields on

their 10-year government bonds,

which are the debt securities

that governments sell to borrow

money, have soared because

their places are collapsing.

This is the epicentre of new crisis. By raising the interest rate that Italy and

Spain have to pay on their

borrowings bond traders are

making a crisis more likely.

Across the Atlantic the yield on

on US Government bonds has gone

dramatically in the other

direction. That does not mean

it is good. It means the bond

market is anticipating a recession. At least there is no

problem for the Government in borrowing money borrowing money cheaply. The problem there is getting

Congress to let it borrow. The

average fall in Europe was 3.5%

but the Italian market dropped

more than 5%. Wall Street fell

4.8%, Japan 3.7%

Chinese market got off relatively lightly. Commodities

were hit hard except for gold

which saw some safe haven

buying. The Australian dollar

is trading at 104.5US down 2%

on where it was this time last

night. I will be back at 10am on Sunday with 'Inside

Business' and a full rundown of

what happens tonight and why. Australians are spending

more and more time driving to

and from work with especially

in our biggest sprawling

cities. Now it seems that even

workers in Canberra

the long distance commute. The

rising cost of housing is

driving them to more affordable

centres across the border. It

can add up to 2 hours to the

working day. But that's not

stopping a growing number of

Canberra workers relocating outside the city. I'm aware

that there's some 300 to 400 people travelling daily between

Goulburn and Canberra to work. Trudie Gillie and her family halved their they moved to Goulburn from

Curtin. She says road

construction delays means they

actually spent more time

commuting within Canberra than

they do on their new journey

across the border and by

changing to a more fuel efficient vehicle their fuel

bill has also dropped. We found

it cost effective because we

are using a does yell car. She prefers the geographical

separation of career and

home. Work's an hour away so by

the time you're home it's sort

of all about the family rather

than having that wind down being cranky if something bad has happened at work. Goulburn

marks its 150th anniversary

next year. The nation's first

inland city is growing by close

to 2% annually and the council

is encouraging free changers to

boost the population beyond

25,000. It is people that are

wanting to get out of the city and experience a more rural lifestyle but still with the

benefits of the cities close to

them. This renovated

federation home has just sold

to a Canberra first homebuyer

for around $380,000.Real estate

agents say affordability is

driving demand from Canberra

and even Sydney workers. They

love the shopping. They love the central the central location, they love the character, the wide

roads. There are moving to

resume commuter bus services

between Goulburn, Cooma and

Canberra and hopes that in the

long term a high speed rail

link will be established.

There's been a science tiffic

discovery that could prevent

viral diseases such as HIV and pave the way for new cancer

treatments. Australian and German researchers have created

a new molecule designed to block viruses from entering

cells and spreading.

a four-year effort but those

involved aren't getting carried

away with their findings or the

potential implications. It is

an exciting scientific

discovery, yes. Is it a medical

breakthrough, that remains to be seen. Researchers created

two new molecules named pit

stops that stop viruses spreading. The pit stops work

on a protein called Clathrin.

It creates pits in cells that

viruses hijack to infull trait.

By inhibiting Clathrin the

virus can't take hold. It is

surprising the range of viruses

that utilise pits to get into

cells. Abole la virus is one,

dengue fever is another, help

C. Australian and German

scientists tested the

effectiveness of the pit stops

against HIV. They found it can stop cell and that has implications for

cancer. It gives hope that the

various pieces of the jigsaw

puzzle, particularly around

cancer, will eventually fall

into place and will come up

with a series of effective treatments against cancer. That

is reassuring for Sonya Malcolm

whose 11hold son Liam was

diagnosed with leukaemia two

months ago. The treatments are

really harsh and the kids -

whatever can make it easier and

more effective on the kids will

always be better for them. The

next step is

pit stop molecule to make sure

it can be safely developed into

effective drugs to tackle a

ring of diseases but clinical

trials are still five years

away. Good medicine worth

waiting for. It might have been

the return appearance of

towards but it was two

Australians who made the

headlines in round 1 of the World Golf Championship event

in Ohio. Using woods' former

caddie Adam

stroke from Jason Day. With

Woods in the mix after an

opening 68. Steve Williams is

no stranger to carrying the bag

for the leader in tournaments but on this

occasion he would have exacted particular satisfaction from

the round he witnessed as his

new boss, Adam Scott, easily

trumped the performance of his

old one, Tiger Woods. Scott

fired a bogey free opening

round of 8 under. A happy

player, a happy caddie. He is

super positive and has me fired up. He believes in

lot and that is what he

expressed to me. He was

following the morning lead of

world number 8, Jason Day, whose round was also without a blemish. In his first

appearance in three months

Tiger Woods had moments to

remember and forget.With new

caddie Bryon Bell. We go way

back. Since the 7th grade. Over

20 years so it has been a lot of fun. Woods two under round would have been gratefully

accepted by Darren Clarke whose

Open hangover continued in a

horror round of 77 though he

did produce the shot of the

day. Mark Webber might trail team-mate Sebastian Vettel by

85 points in the driver's

standings but that does not

mean the Australian has given

up his world championship title

fight. I am looking to keep my

second place in the

championship if not any

misfortune for Seb, I will be trying

can. The Formula 1 season will

continue with the Belgian Grand

Prix at the end of the month.

Australia's journey to the 2014

World Cup in Brazil will start

in Brisbane with the to open their Asian qualifying

campaign with a fixture against

Thailand at Lang Park next

month. Australia and New

Zealand have completed their preparations for tomorrow's

Bledisloe Cup and try nations

rugby clash in Auckland with

both promising a daring brand

wallaby s say they have no fear of

of the All Blacks and aren't concerned about an Eden Park

hoodoo lasting a quarter of a century. The All Blacks accused

the Australians of being cocky

and are determined to avoid

giving the opponents a

psychological advantage for the

World Cup. Hopefully we can put

in a good performance and put doubt into the

Australians. They have 15 guys

that will be on the

have the same. It is how well

we do our job is what it comes

in a down to. Australia has not been

in a position to celebrate in

Auckland since 1986 when the

team coached by Alan Jones

scored two tries to nil. To the

weather now. Another lovely

warm sunny day, a top of 19 and

a low of minus 1.It was mostly sunny sunny around the region.

The satellite image The satellite image is showing thick cloud crossing Tasmania, Victoria

Tasmania, Victoria and western

New South Wales. A low near the Bight is bringing cold winds

and showers to the South

Australian coast. The synoptic

chart indicates a low pressure

system will generate showers

and storms across south-eastern Australia. A front approaching

south-west WA will tomorrow:

No one could be more thrilled

about the return to cold

weather than mark commodity. He

will be back at work on Monday.

A brief recap of the top story.

More than $50 billion has been

wiped off the value of local

shares as fears of a global

is the news for now. You can recession gather momentum. That

keep up-to-date 24 hours a day

with ABC News online. Stay with

us for 7:30 amp CT with Chris

Kimball. Have a greet weekend. Goodnight. Closed Captions by

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Coming up on the program - fast

cars on a tiny track and historic

historic wedding dresses on

display. Also, a history of red

cedar and how it was almost entirely lost to the logging