All about business

The U.S. government curbed short-selling and guaranteed money-market mutual funds on Friday as it worked on a sweeping bailout to mop up hundreds of billions of dollars in toxic mortgage debt, sending global stock markets soaring.

The moves capped a week in which financial markets faced their most serious confluence of crises since the Great Depression in the 1930s and threatened national economies and the worldwide banking system.

“It’s like having a heart attack, and you go and get your chest cracked open and get it fixed, but the next morning you’re still hurting,” said Warren Simpson, managing director at Stephens Capital Management in Little Rock, Arkansas.

“This has been a beast of biblical proportions. Nobody has seen anything like it.”

Lawmakers promised fast action on the toxic-debt plan, which two banking industry sources put in the $500 billion to $800 billion range. A Treasury spokeswoman declined comment.

As the U.S fast cash now. government brought out the big guns to tackle the mounting financial crisis, investment bank Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) bought itself some time to come up with a plan for its future and continued talking to Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz) and other banks about a merger.

On Saturday, a U.S. bankruptcy judge approved British bank Barclays Plc’s (BARC.L: Quote, Profile, Research, Stock Buzz) deal to purchase the core U.S. business of Lehman Brothers Holdings Inc LEHMQ.PK.

But much of the markets’ focus was on Washington, as officials from President George W Bush’s administration, Congress and the Federal Reserve worked to craft a number of plans to restore confidence in shaken stock markets. 

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