Jerry Brown: California Budget Is "Much Worse Than I Thought -- We've Been Living In Fantasy Land"

Europe has exclusive rights to ‘living in a fantasy land’ economics according the unrelenting news flow – apparently not. And, so goes the selective amnesia of the headline feed. I’m sure this news will find adequate coverage in California’s cooking sections of the printed media.

California's troubles represent yet another reason why the "Formulas" are beginning to roll over and Fed initiated QE2. Please review The Timing of QE Was No Accident for further discussion on this topic.

"The Formula" US Fiscal Balance vs US Dollar: Federal Government Budget As A % of GDP, 12 Month Moving Average:

You know it's a bad sign when the outgoing California governor announces a fiscal emergency and everyone ignores him.

Now incoming governor Jerry Brown has realized how screwed the state is and he's announcing his own budget emergency, according to the LAT.

He said last night: "I'm going to try to get the budget agreements done within about 60 days. I don't think we have a lot of time to waste... It will be a very tough budget, but it will be transparent... We've been living in fantasy land. It is much worse than I thought. I'm shocked."

Source: businessinsider.com