  We use the high-resolution TNG50 cosmological magnetohydrodynamical
simulation to explore the properties and origin of cold circumgalactic medium
(CGM) gas around massive galaxies (M* > 10^11 Msun) at intermediate redshift
(z~0.5). We discover a significant abundance of small-scale, cold gas structure
in the CGM of 'red and dead' elliptical systems, as traced by neutral HI and
MgII. Halos can host tens of thousands of discrete absorbing cloudlets, with
sizes of order a kpc or smaller. With a Lagrangian tracer analysis, we show
that cold clouds form due to strong drho/rho >> 1 gas density perturbations
which stimulate thermal instability. These local overdensities trigger rapid
cooling from the hot virialized background medium at ~10^7 K to radiatively
inefficient ~10^4 K clouds, which act as cosmologically long-lived, 'stimulated
cooling' seeds in a regime where the global halo does not satisfy the classic
tcool/tff < 10 criterion. Furthermore, these small clouds are dominated by
magnetic rather than thermal pressure, with plasma beta << 1, suggesting that
magnetic fields may play an important role. The number and total mass of cold
clouds both increase with resolution, and the ~8x10^4 Msun cell mass of TNG50
enables the ~few hundred pc, small-scale CGM structure we observe to form.
Finally, we make a preliminary comparison against observations from the
COS-LRG, LRG-RDR, COS-Halos, and SDSS LRG surveys. We broadly find that our
recent, high-resolution cosmological simulations produce sufficiently high
covering fractions of extended, cold gas as observed to surround massive
galaxies.
