I've been reading multiple news articles over the last few days and have yet to find any concrete statement on the even larger problem. Earlier this year citigroup split off a 'bad bank' called Citi Holdings. At last acknowledgement the taxpayers were guaranteeing over $300 Billion in toxic assets for Citi Holdings. Just the holding companay and that's what was readily acknowledged. When it's all said and done this 'citi-scam' could cost taxpayers a half a trillion dollars.
No, the asset loss agreement was removed along with the TARP repayment. No guarantee from the treasury or Fed to those assets remains or is necessary.
All the supposedly toxic assets have been rising in price since March of 2009 anyway, on the general rally in the bond market. The worst junk on Citi's books went from 30 cents on the dollar at the March lows to 45 recently.
Existing shareholders have been massively diluted by new equity issued at low prices, but that and not solvency is the issue at Citi.