Chip War Truce Declared

A truce has been called in the chips war. The world's business press this morning report that Intel (INTC) finally agreed Thursday to pay AMD $1.25 billion to settle a series of contentious antitrust and patent disputes that spanned the past two decades. The settlement, the Wall Street Journal reports, "may help defuse the mounting antitrust scrutiny Intel faces across the globe. ... Many of those probes were triggered by AMD's complaints." The payment goes only so far. It appears Intel will still be able to offer its customary rebates and discounts to computer makers and it likely won't stop antitrust regulators from investigating Intel's business practices. The payment may not help AMD much either, the New York Times adds. "The truce may not be enough to turn around the fortunes of A.M.D, which has struggled to come up with chips that give it any significant technological or performance edge over Intel, which supplies about 80 percent of the microprocessors that sit at the heart of personal computers," the newspaper writes.

With the benefits of the settlement deal in doubt, BusinessWeek asks its readers to pick a winner. In a poll, its readers say the settlement will be good for Intel by nearly a 2-to-1 margin (as of press time).

The federal government broke all kinds of records for fiscal irresponsibility in October, the first month of fiscal year 2010. According to the WSJ, Uncle Sam racked up a $176.36 billion deficit last month, "more than $20 billion wider than the shortfall recorded in October 2008, driven up by lower tax receipts, stimulus-related revenue reductions and consistently high government outlays." That's about $1.3 billion higher than the Congressional Budget Office's estimate "and wider than the $165.9 billion expected by analysts surveyed by Dow Jones Newswires." The federal government, though, has plenty of shiny stuff in its vaults. With the price of gold topping $1,100 an ounce, CNNMoney.com asks: Is it time to sell the federal gold reserves? It calculates the value of U.S. gold reserves at $288 billion, a sum that would be, at this rate, wiped out by two quarters of deficit spending. It's a moot point. "The government is hanging onto its bullion," CNNMoney.com writes.

British Airways and Spain's national carrier Iberia finally have agreed to merge, the WSJ and others report. After 15 months of drawn-out negotiations, the deal, if approved, would create one of the world's largest airlines, but it could still fall through "if the British flag carrier is unable to agree a deal with its pension trustees over how to fund its massive £2.6 billion pension," the Times of London writes. Staying in the air (or not), Boeing says it has fixed "the problem that had forced it to postpone the maiden flight of its long-delayed 787 Dreamliner," the WSJ writes. A source tells the paper Boeing is still aiming to get the first Dreamliner airborne on Dec. 22.

The Fed could be on a collision course with the White House if the economists canvassed by the WSJ are correct, They predict that the Fed will hike up interest rates in September 2010, "a politically sensitive time considering midterm elections will be right around the corner and unemployment is forecast to still be over 9.5%." The prediction comes as part of a larger survey of 52 economists who expect the unemployment rate to rise to 10.3 percent by the end of this year from its current 10.2 percent before dropping to above 9.5 percent through 2010.

And finally, has Playboy Enterprises (PLA) found a worthy suitor? According to the Los Angeles Times, two credible bidders—Brand management firm Iconix Brand Group and a group led by Jim Griffiths, Playboy's former entertainment president—have emerged to take over Playboy, take it private for a bit more than $300 million, with a plan to restore it back to health. It won't necessarily mean the end for founder Hugh Hefner. "A buyer would have to persuade Hefner not only to relinquish control of the company he started 56 years ago, but probably also to stay involved given his importance to the brand," the newspaper writes.