Citigroup gets rescued

With its stock plummeting - down 87 percent over the last year - and widespread concerns over its future, Citigroup reached an agreement Sunday night with the federal government over a rescue plan, according to The Wall Street Journal.

Under the plan, Citigroup and the government have identified a pool of about $306 billion in troubled assets. Citigroup will absorb the first $29 billion in losses in that portfolio. After that, three government agencies -- the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. -- will take on any additional losses, though Citigroup could have to share a small portion of additional losses.

Also under the plan, the government would be able to buy Citi shares, and the company will receive $20 billion in fresh capital in addition to the $25 billion it received as part of the TARP plan.
The markets responded to the news positively Monday, soaring over 400 points by early afternoon. Citi stock was up $2.20, or nearly 60%, at that time.

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