Essential

Citi Saved

A plan to save Citigroup has emerged. Citi will absorb the first 10 percent of losses—about $29 billion—from its portfolio of risky assets, which includes mortgages, credit cards, commercial real-estate, and big corporate loans. The United States government will stand behind the remaining 90 percent of losses, which could eventually cost $249 billion. In addition, the government will buy $27 billion of preferred stock in Citi and receive dividends at an annual rate of 8 percent. Citigroup's CFO says the plan was created in a "plain vanilla flavor" so that it can be applied to other institutions.