The need to please investors will shape the May Revise and the final budget itself, Peace said.
"It's our short-term borrowing needs that will force us to be more conservative, probably, than we even should be," Peace said. "The question is: How much can you borrow? And the answer is: How much the market will let you borrow."
Well, well, well.....the media is sobering up to the realities of Wall Street and the politicians are starting the explanation that this is going to be a budget with politics limited by Wall Street.
This should start to get real interesting when the budget debates start and then after the political deals are forged, Wall Street (i.e. investment bankers and rating agencies) say that the deal isn't sweet enough. Then watch the politicians squeal about those evil profit gouging investors! Then have the responsible people explain for the squealing politicians that the comments were not seriously made, just venting of frustration.
The next few months of real political crisis are going to be very interesting to watch. It will be interesting to see who will be the political "good cops" and who will be the "bad cops" in the PR game with the public and the gov and legislature try to please the investment community.
This is the first time I have seen the state is preparing to sell $7.5 billion in warrants. Always before it was either bonds, or speculation about warrants.
The SF Chronicle probably doesn't know the difference.