Sept 19 (Reuters) - The following were the top stories in The Wall Street Journal on Friday. Reuters has not verified these stories and does not vouch for their accuracy.
* The U.S. government is working on programs that could represent the biggest intervention in financial markets since the 1930s, including a mechanism to take bad assets off the balance sheets of financial companies.
* The U.S. Securities and Exchange Commission prepared an aggressive assault against short-sellers, saying it would temporarily prevent investors from making bets on stock declines in an attempt to stem some of the worst stock-market slides in years, according to people briefed on the proposal.
* American International Group Inc's (AIG.N) new chief executive Edward Liddy hopes to keep intact many of AIG's largest insurance operations in a publicly traded company, after selling assets to pay back a federal loan.
* Morgan Stanley (MS.N) CEO John Mack went on the offensive, lobbying for intervention and rule changes targeting short selling. Shares rose 3.7 percent.
* Freddie Mac FRE.N disclosed that it has not received principal payments of $1.2 billion plus interest on short-term loans to Lehman Brothers that were due Monday.
* A last-ditch effort to rescue Italian airline Alitalia SpA AZPIa.MI fizzled when a group of Italian investors withdrew an offer to privatize the struggling state-controlled carrier. The pullout leaves Alitalia at the threshold of liquidation with no safety net in sight.
* Warren Buffett moved to rescue Constellation Energy Group Inc CEG.N Thursday, boosting other power-company stocks, but questions remain about whether the industry will continue to have access to the capital it needs to conduct business amid Wall Street's crisis.
* New York Attorney General Andrew Cuomo has started a "wide-ranging investigation into short selling in the financial market" related to companies under pressure over the past week, such as Lehman, AIG, Morgan Stanley and Goldman Sachs Group Inc (GS.N).
* The Wall Street credit crisis and a drop in energy prices from their recent highs are setting the stage for a wave of oil-industry consolidation.
* Declining home values and stock-market losses are eroding U.S. households' net worth, adding strains on consumers that could weigh on the economy in coming months.
* Oracle Corp ORCL.O reported a 28 percent jump in its quarterly profit, and said it doesn't expect to be hurt by the meltdown among financial-service companies.
* Stanley Druckenmiller, the billionaire financier and lifelong Pittsburgh Steelers fan, has withdrawn his bid to acquire his hometown National Football League team.