Why 463 – 20 = 0 at Citi

If you were puzzled by the explanation in this NYT article for why writing down half of $43 billion of mortgage-related assets would bring CitiGroup to the brink when it has a nominal net worth of $463 billion, you're not alone. Brad DeLong thought the piece failed to enlighten, and offered here his own explanation for other things going on in Citi's balance sheet—and not just Citi's.

Update on Monday, November 24, 2008 at 08:40AM by Skeptic

Shortly after I posted this, Citi got its next bailout commitment from the US government.  Mark Thoma aggregates early reactions here.  Among other things, we will guarantee Citi against losses on $306 billion of "troubled" assets.  Gee, and the nice people at Citi have been saying it was only $43 billion.