On Friday the Governor gave a grim overview of the problems faced by California. The California budget is facing a $19.1 billion short fall ensuring a long and drawn out summer of politics and financial hocus pocus. The Governor even made a brief comparison to Greece for all of those who can’t connect the dots and figure out that having too much debt is a bad thing. Too much debt is what built the California housing bubble. Alt-A and option ARMs still languish out in the market. Even the boogeyman of toxic loans is being dwarfed by the problems in prime mortgages. Fannie Mae and Freddie Mac keep issuing quarterly losses and going back to the government well.