Blackstone’s property star looks to build on real estate empire (FT)
Today, Blackstone is the largest property purchaser in the world and the largest property owner in northern California – and many other places as well. It is building a rapidly expanding business providing finance to other operators, taking advantage of the reluctance of banks to lend for property. It is now turning to Europe, where it aims to raise a fund worth up to $5bn to exploit the absence of capital and widespread distress, and to Asia where it has raised $1.5bn towards a similar sized fund, investors say. It has become a powerful global operator with holdings from Australia to Brazil, and India to Ireland – where it recently bought Dublin’s largest hotel for 80 per cent less than its previous owners paid in 2007. Mr Gray is rapidly becoming the public face of Blackstone and is seen within the group as the likely eventual successor to founder Steve Schwarzman. ... “Jon Gray is better than anyone at making cyclical market calls,” says Guy Metcalfe, a real estate banker at Morgan Stanley.

Pension Funds Dispute Math in Detroit Bankruptcy (WSJ)
The two pension funds that represent Detroit's city workers and retirees are challenging the way the city's emergency manager has calculated their unfunded liabilities, leading to a possible showdown in federal bankruptcy court over whether the city's financial position is as dire as state officials are claiming. The two funds have long maintained they were relatively well-funded using accepted actuarial projections. But the city, under the control of emergency manager Kevyn Orr, in July argued that the projected shortfall of the funds is at least $3.5 billion, more than five times previous estimates. Now, as pensions, unions and residents rushed to meet a Monday deadline to oppose the Chapter 9 bankruptcy proceedings—the largest-ever municipal filing—the pensions are saying the emergency manager relied on a report that used overly conservative assumptions on the returns the funds earn on their investments, which led to the ballooning of their projected shortfall.

JC Penney posts loss of $2.16 per share, double projections
(CNBC)
J.C. Penney on Tuesday posted a quarterly loss of $2.16 a share on revenue of $2.66 billion, more than twice that projected by analysts. Analysts had expected Penny to report a quarterly loss of $1.06 a share on $2.76 billion in revenue, according to a consensus estimate from Thomson Reuters. But it's not as ugly as it first appeared because the adjusted $2.16 loss does not exclude a 99 cent loss "associated with tax valuation allowance."

Bankers Supplanted by Elves as Iceland Chases Cash (Bloomberg)
Left with a battered economy after the 2008 collapse of its three-largest banks, the Nordic nation is returning to its roots for growth -- sending its fishing fleet out in records and touting its glaciers and volcanoes to attract tourists. Locals are also reaching back into Iceland’s folklore as a home to elves and other spirits to gain foreign currency. ... Ragnhildur Jonsdottir, who lives in Hafnarfjordur, a small town south of Reykjavik, is benefiting from the island’s reputation as a home to “hidden folks” as they are called. She last year had more than 1,000 visitors to the Hellisgerdi Park, home to the “Elf Garden.” There are also elf schools and shops across the island tout merchandise related to the beings, who according to legend live in rocks. “The elves could help Iceland restore its economy, if we were willing to heed their advice,” Jonsdottir said with smile in an interview this month in Hafnarfjordur.

Earn more money, when you have more sex, study says (seriously!) (NBC)
A new study finds that sexually active people make more money. And if you do it more than four times a week, you earn even more, the study shows. "There is a monotonic relationship between the frequency of sexual activity and wage returns," Nick Drydakis, a senior economics lecturer at Anglia Ruskin University in England wrote in a paper for the International Journal of Manpower.

Everbright Shares Plunge 10% as Brokerage Risks Penalties (Bloomberg)
Everbright Securities Co. plunged in Shanghai as the broker faces possible fines and more restrictions on business after an unprecedented stock trading error that threatens to erode confidence in China’s market. The shares fell by the 10 percent daily limit to 10.91 yuan at the close today, with trading volumes about 68 percent below this month’s average. ... State-controlled Everbright had been suspended since it made 23.4 billion yuan ($3.8 billion) of erroneous buy orders on Aug. 16, an event the China Securities Regulatory Commission described as the first of its kind. The company mispriced 10 million yuan of government bonds yesterday. The CSRC banned Everbright from proprietary trading for three months as the regulator seeks to lure investors back to the world’s second-worst performing stock market in the past four years.

Banks Work Around China's Lending Limits (WSJ)
Chinese regulators have tried for months to rein in lending by the country's banks, most recently by instigating a cash squeeze that left some scrambling for funds. But the banks have stayed one step ahead, keeping the lending spigots open largely through increasingly complicated transactions. The banks' latest effort in their cat-and-mouse game with regulators involves making corporate loans appear on their balance sheets as less risky loans to banks. This allows banks to skirt limits on lending to customers but hides risks that they will be hit by big losses.

Glencore seeks fresh start with $7.7 bln hit to Xstrata mines (Reuters)
Glencore Xstrata took a $7.7 billion hit on Xstrata's mining assets on Tuesday, drastically reducing the value of early-stage projects after falling prices dragged down first-half profit. The mining industry has been pummelled by billions of dollars in writedowns since the start of the year, with cooling prices and demand prospects denting the value of mining projects. Glencore had been expected to follow suit once it completed the acquisition of Xstrata, and in its first post-takeover results on Tuesday it announced the figure alongside a 9 percent drop in core profit.

Blackstone to Sell Broadgate Interest for $2.7 Billion (Bloomberg)
Blackstone Group LP (BX), the biggest manager of private-equity real estate funds, agreed to sell its 50 percent stake in London’s Broadgate complex for more than 1.7 billion pounds ($2.66 billion) in one of Europe’s largest office deals, said two people with knowledge of the transaction. A sovereign-wealth fund is under contract to acquire the interest, said the people, who asked not to be identified because the deal is private. Norway’s government-wealth fund, which had been in talks to buy the stake, isn’t the purchaser, one of the people said, declining to identify the buyer. New York-based Blackstone had agreed not to sell the stake for three years after buying it in a 2009 purchase that valued the whole complex at 2.1 billion pounds, and invested additional capital to improve the property.

Cash-Poor Companies Feed Investor Hunger for 'Happy Meals' (WSJ)
When Energy Conversion Devices Inc. needed cash, the struggling solar-panel maker turned itself into what Wall Street likes to call a "Happy Meal." To make $316 million in bonds more appetizing, the company agreed to lend millions of its shares to hedge funds buying the bonds so they could simultaneously sell the stock in a bet against Energy Conversion's success. ... Companies strapped for cash serve up everything the funds need to profit: bonds that are convertible into stock if the borrower does well, and tools for betting against the company if its prospects sour.

Oversight Board Faults Broker-Dealer Audits (DealBook)
Auditors performed complete and correct audits of at least three brokerage firms last year, the Public Company Accounting Oversight Board said Monday. That amounted to only 5 percent of the 60 audits reviewed by the board, but it may still be a sign of progress. During the previous year — the first in which the board reviewed such audits — none of the 23 audits examined were found to be acceptable. ... The audit problems do not necessarily mean that many of the brokerage firms’ financial statements were wrong. Instead, they indicate that the auditing firms either had conflicts of interest that prevented them from doing an independent audit or that those audits failed to do the work needed to qualify as acceptable.

Meet Sunny: The Obamas' New Puppy (White House)
Sunny was born in Michigan in June 2012, and arrived at the White House today. Just like Bo, she’s a Portuguese Water Dog, which works great for the Obamas because of allergies in their family. Sunny is the perfect little sister for Bo – full of energy and very affectionate – and the First Family picked her name because it fit her cheerful personality.

Volusia County man arrested for keeping alligator in bathtub, cops say (Click Orlando)
A Deltona man has been arrested on charges of alligator poaching on Monday morning after deputies say his mother called the cops on him because he wouldn't remove the alligator from his bathtub. Sean Lewis, 45, told deputies his female friend dropped off the alligator at his home on Gloria Drive several days earlier and was supposed to come back to get it, but never came back. According to the report, Lewis' mother told him to move the alligator from the home several times, but Lewis said he would after a few days. When he wouldn't remove the alligator, his mother called Volusia County deputies, who removed the alligator from the home.