Citigroup investors won't fall for dressed up books

Largely overlooked in presentation materials released to investors was a disclosure that the firm would this quarter reclassify about $US80 billion ($125.4 billion) in assets. Those assets wouldn't have to be marked to market prices. Or they could be held in a way that keeps such losses from hitting earnings.

That has unnerved investors, especially since the holdings involved aren't garden-variety assets. Instead, they include risky holdings such as collateralised debt obligations - structured securities that have already led to billions in write-downs.

Mr Pandit's rationale for the move: the assets could eventually bounce back in value. Investors have heard that one before and don't believe it.