California budget only seems balanced: Kashkari

Kashkari's California quest

The catalysts for a strong stock market rally and robust economic growth this year are not there, said Neel Kashkari, the former Pimco equities chief who's running for the Republican nomination in the California governor's race.

"I'm nervous," Kashkari said on CNBC's "Squawk Box" on Friday. "Obviously we all enjoyed the stock market going up strongly last year. That's why California's coffers look like we're in budgetary balance. It's really just temporarily tied to the stock market."

He sees a "muddle along scenario" for stocks in 2014. "It does feel to me [like] much more of a stock pickers market, than any kind of broad scale rally over the next six to 12 months."

Economic growth will probably be more muted as well this year, he predicted. "We're still coming out of the terrible shock from 2007 [and] 2008. The worst, I think, is behind us. But where are the big engines for economic growth in America?"

As assistant Treasury secretary in 2008, Kashkari implemented TARP, the Troubled Asset Relief Program, which is credited with helping to stem the fallout of the financial crisis.

He said he wants to use his experience in the public and private sectors to "make California a giant engine for the whole country."

With an unemployment rate of 8.3 percent in December, California had one of the nation's highest state jobless rates. The Labor Department releases its next series on regional and state jobs at the end of the month. The jobless rate for the nation was 6.6 percent in January.

"If California is going to grow that slowly," Kashkari continued, "it's going to be an anchor for the rest of the country."

By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.