Reuters reports that Citigroup (NYSE: C) is poised to announce today the sale of $400 billion worth of assets -- that's 18% of the total. We'll need to wait to find out which assets it plans to sell and how much of a loss (or profit) Citi will take when it sells them. But the New York Times reports the company's deciding based on industry growth trends, market positions, geographic growth rates, business plans and financial results.

I worked for a global bank during a credit contraction and part of my job was to figure out which assets to sell. From that experience, I know that Citi's challenge is to find assets that don't fit with Citi but are worth more to another owner. That's because often the assets that make the most sense to sell strategically are the ones that nobody else wants to own. And the ones that make the most sense to keep are the ones that could generate the biggest profit, if sold. Citi's challenge is to sell the $400 billion worth of assets that make strategic sense to sell and will fetch an attractive price. In today's market, that is a challenge.

So what Citi assets could be on the block? Reuters notes that Citi's U.S. student loan business may make sense to sell, after recent legislative changes and turmoil in the securitization market have made it less profitable. Citi may sell Primerica, a consumer sales network for life insurance and investments. And Citi should sell assets on its trading books, which have contributed to much of the $45 billion write-downs that Citi has taken so far.

Citi has already announced the sale of some businesses and it will discuss cost cuts. Specifically, it plans to sell Citi's stake in CitiStreet benefits servicing venture, commercial leasing business CitiCapital and the Diners Club charge card business. It has also sold about $12 billion of buyout loans.

The cost cuts will include $15 billion worth of operating expense cuts on top of $61 billion in cuts taken in the last year. And it's announced 13,200 job cuts in 2008, though tens of thousands more may be needed.

I think the sale of its student loan business could be difficult because anyone who would buy the business would face the same difficulties as Citi. The same logic applies to the sale of its trading assets -- if they have caused losses, why would anyone else want those losses? And can Citi afford to hold out until the market is healthier so it can get a higher price? Or is it in such a hurry to raise cash that it must sell now?

Lots of questions remain open, but I expect more answers today.

Update. Bloomberg News reports that Pandit announced this morning that Citi would "wind down" $400 billion worth of assets over the next three years. The market likes what it hears -- Citi is up 1% in pre-market.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup shares.