“The explosion at Natanz nuclear facility was a result of sabotage operations, security authorities will reveal in due time the reason behind the blast,” said Behrouz Kamalvandi.
Iran’s top security body in July said that the cause of the fire had been determined but would be announced later. Iranian officials said that the fire had caused significant damage that could slow the development of advanced uranium enrichment centrifuges.
The Natanz uranium-enrichment site, much of which is underground, is one of several Iranian facilities monitored by inspectors of the International Atomic Energy Agency (IAEA), the U.N. nuclear watchdog.
Some Iranian officials have said the fire may have been the result of cyber sabotage, and have warned that Tehran would retaliate against any country carrying out such attacks.
An article by Iran’s state news agency IRNA in July addressed what it called the possibility of sabotage by enemies such as Israel and the United States, although it stopped short of accusing either directly.
Israeli officials declined to comment on Sunday.
The IAEA chief Rafael Grossi said on Saturday he will make his first trip to Tehran in that role on Monday to pressure Iran to grant inspectors access to two suspected former atomic sites.
The IAEA suspects activities possibly related to developing nuclear weapons were carried out in the early 2000s at these sites. Iran insists its nuclear programme has no military dimensions.
“Iran has not opposed access to its nuclear facilities, but the IAEA’s questions and allegations should be based on serious evidence and documents,” Kamalvandi said.
Iranian officials said on Sunday that Grossi’s visit was not related to the U.S. push at the U.N. Security Council to reimpose international sanctions on Tehran, Iran’s state TV reported.
President Trump has so far been a remarkably successful foreign-policy president. His success lies in his ability to identify America’s national interest clearly and pursue it without regard to outdated ideological investments.
He recognized that China is a strategic economic threat and not a partner in prosperity. He killed an Iranian commander whose life’s work was the exportation of war and terror—Qasem Soleimani—but he refused to order retaliatory strikes against Iran for the downing of a U.S. surveillance drone when he was told they might cost the lives of 150 Iranian troops. Although perfectionist doves loathe the use of any force whatsoever, Trump’s actions were maximally antiwar as well as pro-American: he eliminated an exporter of war and sent a resounding message to the murderer’s masters, but he did not engage in needless killing in the service of ideology or pride. He drew the right lines.
The president’s bold diplomacy with Pyongyang has not produced a breakthrough on the Korean peninsula as yet, but it has at least opened new possibilities, which the rigid approach of previous administrations precluded. In the Arab world, meanwhile, the president’s peace initiatives have recently paid a surprising dividend with the announcement last week that the United Arab Emirates would normalize relations with Israel. In return, Israeli Prime Minister Benjamin Netanyahu has agreed to postpone plans to annex the West Bank.
This is cold comfort to the Palestinians, who have made their feelings of betrayal by the UAE known. But realistic diplomacy is not about making everyone happy—it’s about pursuing stability, and the deal between Israel and the UAE brokered by the Trump administration is a significant advance in that direction.
Ironically, the Middle East failures of the last two administrations readied the stage for President Trump’s success. The Iraq War launched by the Bush administration (with the support of Democrats like Joe Biden, of course) destroyed the Saddam Hussein regime that had kept a check on Iranian power. More than that, it destabilized Iraq, and ultimately Syria as well, in ways that created channels for wider Iranian influence. The Obama administration then exacerbated these conditions with the JCPOA “Iran Deal” that further loosened restraints on the Islamic Republic. Bush’s war and Obama’s idea of peace both built-up Iranian power.
The expanding reach of Tehran in turn changed strategic calculations for Gulf states like the Emirates. UAE joined Saudi Arabia in a bloody proxy war with Iran over Yemen. Now, as a more peaceful kind of balancing, UAE is strengthening its relationship with Israel, the heaviest counterweight to Iran. More choice of partners means more freedom in the tangled politics of the Persian Gulf, and UAE’s opening to Israel will also in the long run give the Emirates more room to maneuver with Saudi Arabia.
Improved relations with the United States are another obvious attraction for UAE. Israel, for its part, also has anti-Iranian coalition-building in mind, as well as finally putting an end to the now archaic and ritualized hostility of the Arab world to Israel’s very existence. For Arab autocrats the Palestinians were for decades a convenient distraction from discontents at home, a focus for moral outrage. That ploy has begun to wear thin, however, even as Israel’s neighbors find themselves increasingly compelled to devote their attention to the regional ambitions of Iran, Russia, and Turkey.
The internal and external politics of the Arab states have moved away from the disposition that had made the Palestinians so prominent.
The collapse of the Israeli left over the past two decades has altered the terms of engagement with the Arab world as well: the prospect of any generous deal for the Palestinians appears negligible, and the possibility may have been a phantom of the liberal imagination all along. But while such a possibility was at least conceivable, it encouraged the Arabs to hold out. Today everyone knows the “Two-State Solution” is a mirage, and why let a mirage stand in the way of real strategic and economic interests?
For the Arab states, the latter include carefully managing a transition away from their over-dependence on oil, in an era when spikes in petroleum prices can be offset by the increase in shale oil production by the United States. The oil states now have to live with a price ceiling that is also a limit on their political clout at home and abroad. And they have long known that their dependence on oil is a profound vulnerability, one for which there may be no cure, but that can at least be ameliorated through technological development and trade. Israel is an invaluable partner for both purposes.
What the Trump administration has done is to harness these developments for the purpose of greater peace, and if it appears that what the administration has not done is at least as important as what it has done, in considering what it has accomplished here, that is no less to the credit of the president and his team.
Had Hillary Clinton or a Republican like Mitt Romney or Jeb Bush been in the White House these past three years, the U.S. would have followed the same playbook of meddlesome and counterproductive intervention that the George W. Bush and Obama administrations employed. There would be regime change in Damascus or a vigorous ongoing attempt at one, and American policy experts would be incessantly busy with their attempts to micromanage and artificially balance the region’s powers along with the ideological baggage that smart Americans with no “skin in the game” always bring to world affairs.
Donald Trump can succeed where the others fail because he is transactional, not ideological, and he looks out for the American interest—which is peace through stability—rather than trying to bring about peace through perfection, as ideology and technocratic hubris demand.
In 1999, the former electrical engineer had a vision: To save retired jetliners from becoming scrap metal by reusing them. Campbell, 64, is one of a small number of people worldwide who have transformed retired aircraft into a living space.
Bruce Campbell is an inventive engineer who bought a retired Boeing 727 aircraft fuselage and upcycled it into an unusual and innovative home. The huge 3-engine commercial airliner is propped up on concrete pillars in a suburban wooded area outside of Portland, Oregon, and has its own driveway.
The aircraft features a makeshift shower, but he is still working to install a working lavatory and to restore some of the plane’s original interior elements, like seating and lights. Campbell lives in this plane 6 months every year, and spends the other part of the year in Japan, where he is also looking to buy and similarly re-use a retired Boeing 747 fuselage. The 10 acres where he’s building his Oregon home cost $23,000 when he bought them in his 20s, and the plane set him back $220,000.
Unprecedented government stimulus has allowed more companies to borrow at lower rates than ever before. Yet amid the credit boom, smaller firms that power America’s economic engine are often being shut out, hamstringing the recovery just as it begins.
The Federal Reserve’s pledge to use its near limitless balance sheet to buy corporate bonds has aided stricken airlines, oil drillers and hotels. It’s also helped companies from Alphabet Inc. and Amazon.com Inc. to Visa Inc. and Chevron Corp. access some of the cheapest financing ever seen. All told, firms have sold about $1.9 trillion of investment-grade debt, junk bonds and leveraged loans this year, according to data compiled by Bloomberg.
But for companies not large enough to tap fixed-income markets, the outlook is much more dire. Banks are tightening conditions on loans to smaller firms at a pace not seen since the financial crisis, while many direct lenders that have traditionally focused on the middle market are pulling back or turning to bigger deals instead. What’s more, the Fed’s emergency lending programs for mid-sized businesses and municipalities have been criticized as slow, complex, and largely inaccessible.
A lack of credit for small and medium-sized firms could tip many into bankruptcy, adding to the thousands of local businesses that have already quietly disappeared amid the pandemic’s mounting devastation. Given the sector employs roughly 68 million Americans — Fed Chairman Jerome Powell calls it America’s “jobs machine” — and is critical to regional economies across the U.S., a prolonged inability to access financing runs the risk of stalling the nascent rebound.
“The Fed actions have moved issuers that are big enough in front of the velvet rope, and those that aren’t stay outside,” said Peter Atwater, founder of research firm Financial Insyghts and an adjunct lecturer of economics at university William & Mary. “Capital markets access has become a determiner of life or death for business.”
That’s not to say the Fed’s current policy approach is necessarily misguided. In fact, many economists commend its quick and decisive actions when the pandemic hit and say those bold steps were key in staving off another financial crisis and possibly even a depression. But amid such large-scale intervention, certain parts of the economy are clearly benefiting more than others — the big and powerful over the small and financially vulnerable, a disparity that to some degree mirrors the broader inequality problems that have been exposed by the pandemic.
The Fed announced its corporate bond-buying plan in March, opening the issuance floodgates after the coronavirus outbreak brought the market to a virtual standstill. Investment-grade firms have borrowed more than $1.3 trillion in 2020, a record pace, while junk-rated companies have sold $274 billion of bonds, according to data compiled by Bloomberg. In addition, they’ve priced over $270 billion of leveraged loans.
Alphabet’s $10 billion bond sale earlier this month saw record-low yields on the seven-year portion, besting levels set by Amazon in June. Chevron priced a two-year bond with an unprecedented 0.333% coupon earlier this week, while Visa issued seven, 10- and 30-year notes that all beat or matched previous records.
On the high-yield side, aluminum-packaging company Ball Corp. sold $1.3 billion of 10-year notes at 2.875% on Monday, the lowest ever for a U.S. speculative-grade offering with a maturity of five year or longer.
“It’s a battle between the Fed’s $750 billion special purpose vehicle to buy corporate investment-grade and high-yield bonds and those who don’t have access to this free money,” said Stephen Blumenthal, chief executive officer at money manager CMG Capital Management Group Inc.
It’s a battle that smaller companies are decidedly losing.
Some 70% of bank senior loan officers surveyed by the Fed said they have tightened lending standards on loans for small commercial and industrial firms in the third quarter. That’s the highest proportion since late 2008. The trend also extends to mid-size and larger firms as well, though the latter enjoy unprecedented access to capital markets. About 54% said they increased premiums for small borrowers, the most in over a decade.
“Everyone is willing to lend to the biggest firms,” said Olivier Darmouni, a professor of finance at Columbia Business School. “But since the pandemic has not been tamed, creditors are now asking if the businesses will actually survive and they’ll get their money back. For smaller firms, there’s a lot more uncertainty of that.”
In a bid to encourage banks to extend credit to mid-size firms, the Fed introduced its $600 billion Main Street Lending Program in April, wherein those making eligible loans can sell 95% of them to the central bank. Despite efforts to broaden the program, it’s issued just $253 million in loans as of Aug. 10. That’s compounded criticism that it only works for a narrow set of companies, is too complex and doesn’t provide enough incentive to risk-averse lenders.
Boston Fed President Eric Rosengren said Wednesday that as borrowers and banks become more familiar with the program, it’s seeing a steady increase in participation, adding that it may become even more essential should the coming months bring a resurgence of the virus.
A spokesman for the Fed referred Bloomberg to Rosengren’s remarks when contacted for comment.
Still, the facility stands in contrast to the Paycheck Protection Program, run by the Small Business Administration and the Treasury, which dolled out more than 5.2 million loans totaling $525 billion before closing last week. The PPP facility, for its part, has gotten its own share of criticism, with some saying the smallest companies and those in disadvantaged areas have been shut out, while politically connected businesses and firms that aren’t struggling have gotten funding.
Making matters worse, direct lenders, which often provide financing to small and mid-size firms, have been retrenching for months as they tend to their own portfolios, while those sitting atop the most capital are increasingly targeting bigger deals.
Business development company Ares Capital Corp. said on a second quarter earnings call that the average Ebitda size of companies it finances has doubled versus the same period a year ago, and that it’s also charging more to lend. Apollo Global Management Inc. set up a new lending business last month focusing on loans of around $1 billion.
“There is little the Fed can do when there are liquidity issues outside the banking system,” Financial Insyghts’s Atwater said. “It has really highlighted the challenge in trying to provide credit to small businesses in a way that is prudent for the lender.”
Cerebro Capital, an online platform that allows middle-market borrowers to source credit facilities, saw a surge in demand for its services amid the tighter lending market, according to Allan Smallwood, senior director of capital markets at the firm. At the end of July, Cerebro helped a fifth generation family-owned commercial printing business close a deal after its existing bank lender exited when it tripped a loan covenant, he said.
Of course, the tale of diverging ‘haves’ and ‘have nots’ is hardly new in credit, manifesting when economic turbulence prompts lenders to retrench and investors to seek the relative safety of stable, blue-chip firms.
But the magnitude of the disparity this time around is more alarming when combined with expectations for record corporate defaults this year and following second quarter data showing the economy suffered its sharpest downturn since at least the 1940s. A growing chorus is also warning on inflation, which can hit smaller firms particularly hard. One of those is Larry McDonald, founder of The Bear Traps Report investment newsletter.
“It’s an inequality explosion in terms of financial sustainability,” said McDonald, who also authored the book ‘A Colossal Failure of Common Sense’ about the demise of Lehman Brothers Holdings Inc. “You have financial conditions tightening in some spots, and then wide open for the big guys — it’s crazy.”
Finally, some good news! Conservationists have successfully reintroduced previously extinct large blue butterflies to the UK, with the creatures populating parts of the country for the first time in 150 years. Around 750 large blue butterflies, recognizable by the distinct row of black spots on its upper forewing, emerged this summer in Rodborough Common in Gloucestershire, southwest England, after experts released 1,100 larvae to the site last year. The globally endangered creatures, which have a wingspan of more than two inches, were declared extinct in Britain in 1979 and hadn’t been seen in Rodborough for 150 years.
Experts from the National Trust, Butterfly Conservation, the Limestone’s Living Legacies Back from the Brink project, Natural England, Royal Entomological Society and the Minchinhampton and Rodborough Committees of Commoners spent five years preparing the area for the butterflies.
Key to the project’s success was to control the area’s red ant populations — “myrmica sabuleti” — which are crucial to the large blue butterfly’s life cycle. David Simcox, research ecologist, said: “In the summer when the ants are out foraging, nature performs a very neat trick — the ants are deceived into thinking that the parasitic larva of the large blue is one of their own and carry it to their nest.” “It’s at this point that the caterpillar turns from herbivore to carnivore, feeding on ant grubs throughout the autumn and spring until it is ready to pupate and emerge the following summer,” he explained in a statement.
Experts restricted cattle grazing and controlled the area’s scrub cover to aid the area’s ant population, and encouraged the growth of wild thyme and marjoram plants, which are a source of food and a key egg laying habitat for the butterflies.
The butterfly has been re-introduced to the UK from continental Europe as part of an almost 40-year conservation project. Experts say that the insects have established a “stronghold” at core sites around the country, and in some cases have naturally colonized some areas in southern England. “Butterflies are such sensitive creatures, and with the large blue’s particular requirements they are real barometers for what is happening with our environment and the changing climate,” Richard Evans, area ranger for the commons, said in a statement.
“Creating the right conditions for this globally endangered butterfly to not only survive but to hopefully thrive has been the culmination of many years work,” he added. “One of the greatest legacies of the re-introduction is the power of working together to reverse the decline of threatened species and the benefit the habitat improvements will have for other plants, insects, birds and bats on the commons,” he said.