Every year around this time I see loads of these brightly coloured caterpillars.
They are the Larvae of the Drury’s jewel moth (cyclosia papilionaris) - and when they hatch i'll do a blog post on this interesting moth.
So why do they look like this? Clearly the colours are a warning that this beasty may have some toxic chemicals in its body, and the spines are perhaps the delivery mechanism. Also biologists do have some ideas about the function of larvae's lumps below the spines: The glutinous cones could break off in the same way some lizards' tails snap off in a predator's mouth. This trick might help the larvae escape from hungry insects and birds, but researchers have not yet confirmed this.