Wednesday morning headlines

What recession?: We're looking at 3.9 percent annual growth rate for the third quarter, which is way more than most experts had expected and reflecting an economy in decent shape. Increases in exports, consumer spending and business investment apparently made up for another plunge in home construction. Keep in mind, of course, that tighter lending policies towards the end of the quarter probably slowed things down. This morning's GDP numbers add a little spice to the Federal Reserve's decision on whether to cut interest rates. With the economy continuing to grow, there could be additional pressure on Federal Reserve policymakers to just let things be. But the pressure to cut rates another quarter point might be even greater. We'll know in a few hours. (Bloomberg, NYT)

Strike delay?: That's the consensus emerging after yesterday's contract talks between the WGA and the producers, this time with a federal mediator. The buzz is that a walkout wouldn't start until next week at the earliest (the current contract expires at midnight tonight). Negotiations will resume this morning, with the Writers Guild set to present a new proposal. But the guild doesn't appear prepared to continue working under the old contract. That would seem to make a strike almost inevitable. But in a labor dispute, you never know. From Variety:

The town's strike fears have been fanned by a variety of troubling signals -- continued combative rhetoric from both sides, lack of progress at the bargaining table, battles over guild strike rules, the Teamsters' pledge not to cross picket lines and strike preparations by the WGA. Additionally, companies are crying "foul" over a new flyer distributed by writers, claiming an eleventh hour rollback in pension and health fund contributions was submitted by studios. In fact, the studios and networks withdrew their major rollback proposal on residuals two weeks ago. And the WGA's rhetoric has aroused animosity from other guilds, who point out the WGA has negotiated in an atmosphere of isolation. There has been zero contact with the DGA in recent weeks, insiders point out.

Effect on TV: The late-night talk shows and soaps will feel the pinch first, followed by primetime comedy and drama (most vulnerable are the new shows that are trying to attract viewers). The networks supposedly have four or five filmed episodes of most of their shows – plus one to five scripts that have been written but not yet shot. From Variety:

Most likely, original episodes will start disappearing by early December or January. And it's no mystery what will fill those timeslots. "The most likely outcome is more news and more reality," said NBC U entertainment co-chairman Ben Silverman. Real question mark, then, is just how nets will sked all the reality and news programs they've been bulking up on during the past year. "Do we have a schedule, per se? No," said one webhead. "Do we have a lot of options? Yes." Of all the webs, Fox is sitting pretty with "American Idol" slated to return for the second half of the season, ensuring at least one net will have the lights fully turned on in the event of a work stoppage. ABC, meanwhile, can crank up "Dancing With the Stars"--and maybe even revive "Who Wants to Be a Millionaire."

Child porn argument: So Congress came up with this all-encompassing law that would prosecutes most anyone who sees or owns a movie depicting underage sex - films like "Traffic" and "American Beauty." A lower court said the law violates free speech, but several members of the Supremes were wondering out loud whether that's the kind of free speech worth protecting. "The reason obscenity is excluded entirely from First Amendment protection is that it has no redeeming social value," Justice Antonin Scalia said. Scalia was one of the dissenters in 2002 when the court struck down parts of the Child Pornography Protection Act because they were written too broadly - or as Justice Anthony M. Kennedy wrote, they could apply to a production of "Romeo and Juliet." (Washington Post)

Torre update: The NY Post is reporting that it's a three-year deal worth $14.5 million and could be announced in the next day or two. But as of last night, the deal wasn’t done – and when you’re negotiating with Frank McCourt, well… One issue: the salaries of Torre's potential coaches (as a rule the Dodgers do not pay their coaches very well). At least two Yankee coaches, Larry Bowa and Don Mattingly, are expected to join Torre if the money is resolved.

Are local prices rising or falling?: It depends who is doing the counting. A new report finds that home prices in Los Angeles fell 5.7 percent in August from a year earlier. The Standard & Poor's/Case-Shiller composite index uses a different methodology to determine price movements than straight sales and price data. The L.A. index peaked in September 2006 and has fallen about 6 percent since. Well, okay. But what about houses in certain neighborhoods that are going for more than the asking price? (LAT)

Another Countrywide suit: CEO Angelo Mozilo has been accused by a pension fund of helping executives pocket $842 million in improper gains by artificially inflating its stock price through buybacks. The New England Teamsters and Trucking Industry Pension Fund said that the maneuver came at the expense of ordinary shareholders. The shareholder derivative lawsuit was filed by the securities class-action specialist Coughlin Stoia Geller Rudman & Robbins. (Reuters)

Sony considering sale?: It's hired L.A. investment bank Houlihan Lokey Howard & Zukin to assess the value of its animation studio and digital visual effects company, according to the NYT. The idea is to sell no more than a 50 percent stake in Sony Pictures Animation and retain some interest in Sony Pictures Imageworks.

Imageworks, which now rivals George Lucas’s Industrial Light and Magic and Peter Jackson’s Weta Digital as one of the biggest effects houses, has been expanding lately. It bought 50 percent of what now is Imageworks India, where it employs about 85 workers, and is to open a new plant in Albuquerque next year. What became Imageworks began at Sony Pictures in 1992 with five people using computers to help plan complicated live-action scenes — a practice that has since become known as previsualization. It quickly became an in-house special-effects shop with credits on Sony movies like “In the Line of Fire” (1993) and other studios’ films like 20th Century Fox’s “Speed” (1994).

Ticketmaster jam: Its computer system for the Beijing Olympics crashed yesterday after a heavy demand for tickets (these were only for China residents; residents from other countries are getting tickets through other means). This was to have been a major debut for West Hollywood-based Ticketmaster, which won the exclusive contract to supply ticketing services and to remain in the country as a ticket supplier afterward. The system went down just after sales started (only 9,000 tickets were sold). There were error messages on the Web site, a hot line phone number was constantly busy - a real mess. (WSJ)