Bernie Madoff may not be dying of cancer, after all. The Federal Bureau of Prisons just released a statement on the subject, and it's denying the report in today's Post that the fraudster's days are numbered:

Writer Fred Bernstein took his 7-year-old twins to P.S. 1 in Queens recently to take in a little contemporary art. The problem was that he missed the tiny sign at the entrance which warned that the galleries contained "graphic imagery," which meant he had to usher his sons out of the room when he realized one of the exhibits contained "a giant photo of Katie Couric delivering the evening news with her genitalia exposed." Really? No, not really. It's Couric's head attached to Britney Spears' body. But who knew the museum was home to such a cultural treasure? If you're not working today—or you are at work, but you have a boss who appreciates the boundary-pushing nature of contemporary art—the photo can be seen in all its glory here. [NYT/City Room]

Were you aware that "Pet Fashion Week" went down this past weekend in Chelsea? You missed it? Guess you'll have to wait until next year to see a dog model a handmade gown made of red satin and black lace. [NYDN]

The Standard's campaign to make the hotel synonymous with sex appears to be backfiring. The Post caught on to shenanigans over the weekend, and in an "exclusive" today, breaks the big news that some of the Standard's neighbors in the meatpacking district are being routinely exposed to hanky-panky in the hotel's windows. And some of the witnesses to these acts have been innocent children! Even more outrageous: The hotel even appears to be encouraging this behavior on its own website!

Marisa Tomei sitting on a bike with boyfriend Logan Marshall-Green in SoHo ... Heather Mills walking home after a visit to the hair salon ... Drew Barrymore leaving Gemma after lunch ... Ali Lohan walking in NoHo with a male friend ... Kirsten Dunst hanging out with younger brother Christian in SoHo ... Rihanna arriving at a recording studio downtown ... Carolina Herrera eating a late dinner at Elio's last night ... Britney Spears taking her sons Sean and Jayden to see The Little Mermaid on Broadway ... Sophia Bush leaving Pop Yogurt in SoHo with boyfriend Austin Nichols ... Hugh Jackman walking with his daughter along the Hudson River ... Lindsay Lohan leaving the Bowery Hotel in the back seat of an SUV ... ... Amanda Seyfried eating ice cream on Houston Street .... and Frances Bean Cobain walking with friends on on 14th Street.

• Real Housewives star Jill Zarin and her husband, Bobby, put their apartment on the market just six weeks ago. But they've already been forced to drop prices. The three-bedroom condo at 401 East 60th Street, which the Zarins put up for sale for $3.2 million in July, is now $2.995 million. [Cityfile, PDE]
• Former Treasury Secretary W. Michael Blumenthal and his wife, Barbara, have purchased an apartment at 1095 Park Avenue. The couple, who sold their former home at 550 Park Avenue to socialite Phyllis Mack in January 2008, paid $5.6 million for the two-bedroom apartment. [Cityfile]
• Fortress Investment Group co-founder Randal Nardone has dropped the price of his 4,456-square-foot condo at 240 Riverside Boulevard, six months after putting it on the market for $11.75 million. The former billionaire, who picked up a massive apartment at 101 Warren Street last November for $22 million, has listed his former pad for $10.95 million. [Cityfile, Corcoran]

Bernie Madoff is not doing well. Not just because he's behind bars, where he'll remain for the rest of his life. But because he's suffering from pancreatic cancer and "doesn't have long to live," say several of his fellow inmates who spoke with the Post:

Blog kingpin Nick Denton turns 43 today. Adam Gopnik, New Yorker staff writer and author, is turning 53. Comedian Dave Chappelle is turning 36. Sirius CEO Mel Karmazin is 66 today. Funnyman Craig Kilborn is turning 47. Herb Allison, the former president of Merrill Lynch and now an Assistant Secretary of the Treasury, is 66. Nobel Prize-winning economist Harry Markowitz turns 82. Vince McMahon, the man who brought you professional wrestling, is turning 64. Actress Marlee Matlin is 44. Former governor, presidential candidate, and Fox News talking head Mike Huckabee is 54. Former US Senator Max Cleland is turning 67. Author Paulo Coelho is 62. Steve Guttenberg is turning 51. And acting legend Chad Michael Murray celebrates his 28th birthday today.

• Lindsay Lohan's troubles continue: Last week, the cell phone she left behind at a bodega in NYC prompted her to call the cops; now the police in LA are investigating a break-in at her Hollywood Hills home, which her family now says may have been an inside job. [People, TMZ, NYP]
• David Blaine's magic skills have turned a bit rusty. Although he was told not to go swimming in the ocean on account of Hurricane Bill, he jumped in the water at Necox Beach in Watermill anyway. And instead of magically transporting himself to safety, a couple of lifeguards had to go and rescue him and a few of his friends. [NYP]
• Ryan Jenkins, the reality show contestant wanted for murdering (and dismembering) his ex-wife, Playboy model Jasmine Fiore, was found dead of an apparent suicide yesterday. [AP, TMZ]

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• Rising star Nate Appleman will be moving from SF to NYC to take up the helm at Pulino's, the Keith McNally pizzeria slated to open in December. [GS]
• Chef Laurent Tourondel is hoping to take his BLT franchise to the new W Hotel and Residences in the financial district. [Eater]
• The Parks Dep't was supposed to pick a winning bid to operate Tavern on the Green last month. It didn't, and now the bidders are getting antsy. [NYO]
• Julian Medina, the owner of Yerba Buena and Toloache, is expanding: Yerba Buena Perry will open in the West Village next Wednesday. [GS]
• The restaurant Joseph Leonard only opened a few weeks ago, but it's already been rammed by a car. Fortunately, the damage was minimal. [VV]
• A few restaurant closings around town in recent days. [Eater]
• The city is facing off against "a small flotilla" of hot dog carts outside the Met; the vendors claim they can be there because they're disabled veterans. [NYT]
• Starbucks is either raising its prices or lowering them. It's hard to say, really.

In addition to the handful of glassy hotels downtown that are already open for business, and the two new properties that are currently under construction, there's a third ultra-modern high-rise hotel now in the works. It doesn't have a name yet and the owners have yet to settle on a final location—it will be somewhere "between the Lower East Side and Soho"—but it may very well feature the smallest rooms in town when it eventually opens. How small? "So small that the shower is now a cylindrical tube," and there wasn't really any room for a proper bathroom, so "the toilet appears to be more or less on full display." [Curbed]

• Last night's long-delayed premiere of the sixth season of Project Runway—on Lifetime, not Bravo—earned the show its highest ratings ever. [NYT, THR]
• Breathe easy: Anna Wintour's travel itinerary for the fall fashion shows in London, Paris and Milan will not be affected by the recent round of budget cuts at Condé Nast. She'll be staying at the Ritz in Paris, as usual. [NYP]
• The cuts have claimed Condé's supply of coffee stirrers, however. [P6]
• Another member of the Sulzberger clan is joining the New York Times. [NYO]
• News Corp. has been meeting with newspaper publishers to discuss forming some sort of "consortium" to charge people for access to news online. [LAT]
• News Corp. is also in talks to sell its Dow Jones stock market index. [NYT]
• Harvey and Bob Weinstein have a lot riding on the success of Quentin Tarantino's Inglourious Basterds. How is the movie expected to perform at the box office this weekend? Not too bad, per early estimates. [THR]

The names of Marc Dreier's victims were released by a judge yesterday. Three hedge funds—Elliot Associates, Fortress Investment Group, and Eric Mindich's Eton Park Management—were at the top of the list of investors who were defrauded by the imprisoned lawyer. But a bunch of fashion/retail companies were swindled, too, including Nike, Adidas, Diesel USA, Tommy Hilfiger, and COOGI Partners, the company that controls Fubu and Heatherette. Let it be said, however, that Hilfiger and Heatherette founder Richie Rich almost certainly had nothing to do with the homeless look Dreier was rocking in the days after he was arrested. Men who commit financial crimes just have a tendency to commit fashion ones, too, that's all. [Crain's]

Listen up, aspiring actors and musicians! On August 28th, you can forget the fact you're waiting tables and you don't have an agent and delude yourself into thinking you're a star! A company called EL-Nightlife is holding an event called "A Walk Down the Red Carpet." If you've ever wanted to "feel and look like a celebrity for the night," you'll be thrilled to hear that EL-Nightlife is now making it happen. Because "anyone can purchase tickets for $40 and elevate them selves [sic] to super-star [sic] status." Details on this exciting event, the absurd press release, and some background on the illustrious founder of EL-Nightlife, Grigorij "Greg" Richters, after the jump.

Gov. David Paterson has finally figured out why New Yorkers don't like him. It's because he's black! And now the "white-dominated media" is pushing him to bow out of the face for governor next fall: "My feeling is it's being orchestrated, it's a game, and people who pay attention know that." Sure, Americans may have put a black man in the White House last fall. And, sure, New York may be one of the most liberal states in the country. But presumably suggesting it's all about race is a better strategy than copping to the fact that people don't like you because you're incompetent. [NYDN]

Goldman Sachs has a image problem, as you may have noticed. The firm has been battered by bad press in recent weeks as critics have accused Goldman of having a hand in everything from the destruction of the cookie industry to the spread of nuclear materials to rogue nation-states. (Okay, the firm hasn't been accused of that last one just yet, but it's just a matter of time.) Now, as we head into fall and get closer and closer to bonus season, Goldman chief Lloyd Blankfein is getting worried that it's about to get worse. But what to do?

Bernie Madoff's boat is up for sale. The 90-foot yacht, which is named "Bull" and was constructed in 2007, has been docked in Antibes, France ever since Madoff's assets were frozen. But now the administrators overseeing the liquidation of Madoff's investment firm have approved its sale. A British firm has the official listing posted online. Unfortunately, it doesn't indicate if the yacht comes with the bikini-clad babe sitting on the deck. But you could always try asking! [Telegraph]

These are difficult economic times, sure. And keeping up appearances isn't easy, especially if you follow the advice of some experts who argue that you need to look even better than usual during a financial downturn. But you can only cut costs and stoop so far, you know? If you insist on buying really expensive heels even when you can't afford them, but you then wrap your feet in plastic bags so you can return the shoes in a few weeks, you probably should just do your shoe shopping at Payless and call it a day. Really. We'll forgive you. [HuffPo]

Marc Jacobs is reportedly tying the knot this weekend in Provincetown to fiancé Lorenzo Martone. One person who is none too excited by the prospect that Jacobs is finally settling down: Jason Preston, Jacobs' "rent boy" ex-boyfriend, who was once so devoted to the designer, he had his logo tattooed to his forearm. We're not sure commiserating on Twitter with Courtney Love, of all people, is going to provide Preston much relief from his relationship blues—she's got issues of her own to worry about—but if you have a moment today and want to send him a tweet of encouragement (or maybe hire him to "host a party or event"), feel free to reach out. [Twitter]