What does the market know about California's finances that the rest of us don't?

The bond markets are depicting some very ugly goings-on in California

Over at The Big Picture, Barry Ritholz focuses our attention on the meltdown of California's municipal debt obligations. Translated for progressives: the market believes that something very bad -- Greece-like, in fact -- is happening in the Blue State Utopia of windmills, unicorns and Jerry Brown.

California Muni Bond Fund Shellacking

Since so many of you have asked: These funds are getting mangled on expectations of — All Aboard! Munis and California joining Ireland on the default train... Even the general Muni funds have lots of California Exposure...

Sure, the Governor declared a "fiscal emergency" a few months ago. True, the state wants to sell $14 billion in new debt instruments to any suckers interested parties it can find.

But we already knew all of this. Everyone in America already was aware that Cali is an economic train wreck.

Everyone, that is, except for Paul Krugman who has yet to compare his insane national policy prescriptions with what is already unfolding in the Democrat Utopia of California.

So what's really going on? Your guess is as good as mine, though if you believe in "The Wisdom of Crowds", you may want to batten down the hatches.


Hat tip: Mish.