Trevor Manuel was right. The markets are amorphous. After new finance minister Tito Mboweni's first medium-term budget policy statement on Wednesday the rand fell sharply and the yield on South African government bonds maturing in 2026 rose to almost the highest level in a year, at 9.31%.
That last bit is the market signalling displeasure. Bond yields rise when bond prices fall. Mboweni was signalling that we were already in too much debt and would need more debt to get out of the "debt trap" beginning to enclose us. The "market" was saying: "Sure, Governor, we'll buy your bonds but we want to pay less for them and we want the same returns."
It would be naïve to expect less, I suppose. But we're traded by algorithms. It almost gives one hope, in the face of encroaching artificial intelligence. If the markets can't see the emerging political strength of President Cyril Ramaphosa now, and analyse what that might promise, maybe they never will.
And if the markets are too thick to see what a combination Ramaphosa and Mboweni might become, then my advice is to start betting against them. Out of nowhere, out of the crisis that suddenly felled Nhlanhla Nene, steps Mboweni to stick a rod up the presidential back and to suddenly make the political ordeal of fiscal consolidation (cutting our debt) perfectly achievable.
The primary obstacle to cutting our debt isn't economic. It's political. It's greedy, useless ministers and officials threatened by the removal from office of Jacob Zuma. They, in turn, threaten to upset the political balance in the ruling ANC's national executive committee should their largely redundant ministries or budgets be touched by the cold hands of closure or austerity.
It has been a political problem for Ramaphosa. It isn't going to be any kind of problem for Mboweni.
I have to be careful what I say about Ramaphosa. I am not his imbongi. He has, in my view, some serious weaknesses as the leader of a complex economy like ours. He is way too conventional. Capitalism is our only viable future but it needs to be bent and shaped to our purposes and I'm not sure he knows how to do that.
Ramaphosa learnt his business the easy way. Swept out of politics straight into the boardroom, he missed the suffering, the horror, of failed enterprise, of trying again. Of risk, both personal and financial. His instinct is to trust the great and the good, the big bankers, the big industrialists.
Ideas about changing our capitalism, of making it truly and materially more inclusive, frighten him. I remember years ago suggesting to him that the state should pay an endowment of R50,000 to every child at birth. Open an investment account the child can access at 21. Recoup the investment from the child's estate when they die. He shook his head. Can't do that.
Convention worries that the child would waste the money, piss it up against a wall. Unconvention understands that 25% of them would do something seriously useful with it. And the managers of our (conventional) sovereign wealth fund would have access to the money until the recipients turn 21. About 1.1-million kids are born in SA every year. By the time the first child turns 21 there would be 23-million people in the scheme.
That's inclusive, an addition to the nation's savings and, once invested by the owners, growth-inducing. What's not to like? The same with worker representatives on all boards. Convention worries that the unions would be "co-opted" or that once you make the bucket-wheel excavator guy a director he'd be overwhelmed. Nonsense. Our boards could do with some diversity for a start. And the unions could nominate "their" directors. They could be doctors or lawyers, who cares? They just have to represent labour properly, make sure everyone in a company has the same information at the same time. The Germans do it and they have the most productive workforce in any industrial economy, including China. What's not to like?
The thing about Mboweni is he's conservative but not as conservative as the president. He won't take fiscal risks but he'll prod Cyril in some promising new directions. He says he wants a state bank. Well, he should go and talk to Mark Barnes at the Post Office. Barnes also wants one, knows what its job would be, how to do it and what to do it with. Two hours of talks, decision in principle made, and the rest is political will.
The thing the markets missed on Wednesday is the catalytic promise implicit in Mboweni's appointment. He's been more than a decade in the wilderness and I doubt he's enjoyed it. He won't waste this opportunity...