British Airways and Spain's Iberia are in talks to create the world's third-largest airline and inject some "long-overdue" consolidation in the industry, in the words of BA CEO Willie Walsh.

Where would a combined BA-Iberia leave American Airlines, which was in talks to form a transatlantic alliance with the two airlines? Would a BA-Iberia merger scuttle American's chances at an alliance?

The argument for forming an alliance and seeking an antitrust waiver was that the "Open Skies" agreement -- which frees up restrictions on carriers flying between the United States and Europe -- is set to increase transatlantic competition among airlines. That's a harder pitch to sell if a BA/Iberian merger, creating Europe's largest airline, shrinks the number of major players in the market.

Getting regulatory approval for the alliance was uncertain to begin with. An immunized alliance between American, the largest U.S. airline, BA, Europe's third-largest carrier, and Iberia, Spain's largest airline and the biggest operator of flights to Latin American player, would create the most extensive network between Europe and the Americas.

To make things even more complicated, British Airways has 40 percent of takeoff and landing slots at Heathrow, by far the largest share of any airline. In 2006, BA and American held over half the capacity between Southeast England and the United States between them.

In the past, BA and American have tried to form an alliance and failed. U.S. antitrust authorities  asked the carriers to give up some slots at Heathrow if they wanted approval, but the airlines did not want to part with the slots. Times have certainly changed since -- fuel prices have skyrocketed and the economy has weakened -- but the same requirements for Heathrow would likely apply again.

What's American to do? U.S. airlines have lost more than $35 billion in the past few years. Delta Air Lines and Northwest Airlines have agreed to merge, creating a formidable competitor as the world's largest airline. And United and Continental have also agreed to a plan of global co-operation .

If BA and Iberian are off the table, an alliance with another carrier could be American's best shot at surviving this downturn. US Airway, we're looking at you.

A dress that was called an "explosion of ruffle" was deemed worse than another one that looked like "toilet paper caught in a windstorm" by Project Runway's hyper-discriminating judges this week, "Auf"-ing 27-year-old California designer Emily over rival Keith in the third episode of this season.

Emily's offing was somewhat surprising after the judges ruthlessly panned Keith's dress -- a shapeless silhouette covered in squares of varying fabrics meant to look like fringe. Designer and "Runway" judge Michael Kors likened Keith's dress to toilet paper more than once.

"Seriously the toilet paper dress is in??" wrote one viewer on the Project Runway message boards.

Even Emily herself was shocked at the decision, defiantly stating in her exit interview: "Hell no, this was not the losing dress for the challenge. That dress was beautiful."

But the judges would beg to differ. Nina Garcia called the bright pink and orange ruffles inspired by New York's neon lights "a Carmen Miranda moment" and later told her fellow judges that she had "no comment" about the dress.

"The worst review is no review," countered Kors.

The challenge's winner was also somewhat controversial. Kenley, a 25-year-old from Pompano Beach, Florida, took the top honor with a high-waisted green and purple printed dress inspired by a New York City tiled wall.

The judges loved the design, but nevertheless poked fun at the fact that it reminded them of the 80s.

"It's very 80s, Joan Collins, Powerbitch dress," Kors said, adding that "a girl who was not around in the 80s would really appreciate this dress."

The judges also gushed over the other top two designs -- a black "architectural" skirt and top by Leanne and a backless blue printed dress by Terri. 

John McCain thinks Barack Obama is playing the race card.
 
The Republican presidential candidate and his staff were upset by a comment Obama made on the campaign trail.
 
During a campaign speech, the Illinois Democrat told supporters Republicans were trying to make voters scared of him.
 
"What they're saying is, well, we know we're not very good, but you can't risk electing Obama. You know, he's new, he's -- he doesn't look like the other presidents on the currency. He -- you know, he's got a -- he's got a funny name. I mean, that's basically the argument, he's too risky," Obama said.
 
McCain's campaign manager, Rick Davis, jumped on the comment.
 
"Barack Obama has played the race card, and he played it from the bottom of the deck. It's divisive, negative, shameful and wrong," Davis said in a written statement.

 
McCain agreed with Davis, telling reporters he was "very disappointed" that Obama had used the race card."Race will not have any role in my campaign, nor is there any place for it. I'm disappointed that he's used it." 
 
The back and forth came a day after Davis unveiled a new McCain attack ad comparing Obama to Paris Hilton and Britney Spears, insisting in a conference call with reporters that Obama was the biggest celebrity in the world.
 
A report out the same day said about a third of McCain's advertisements are negative attacks on Obama, while 90 percent of Obama's ads don't even mention McCain.
 
Obama spokesman David Plouffe told reporters Obama in no way used race as an issue and that McCain's camp was trying to distract voters from larger issues.
 
"Folks ought to just buckle up their seat belts," he added. "We assume this is what the campaign will be like."

McCain dismissed Democratic charges he was taking the low road, saying Obama had "run negative ads on me continuously, and I might point out for the record that his was the first." 

So what do you think? Does the McCain campaign have a legitimate complaint? Or is this just part of a strategy of using negative attacks erode Obama's standing with voters? 

Quick quiz: what personal hygiene chore is acceptable at a public parade?

* flossing to get big chunks of meat out of your teeth

* clipping your big old curling yellow toenails

* cleaning your ears with a waxy cotton swab you found

* brushing your hair

Yeah, I suppose if you have to do one of those, hair brushing would be the best.

Unless of course you try one of those Arthur Fonzarelli moves and you can't even hold on to your brush, and the woman next to you gives a look of disgust, and then the parade marchers start shouting "Dork! Dork! Dork! over the loudspeaker.

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Turkey's Prime Minister Tayyip Erdogan drops his hairbrush while combing his hair as his wife Emine looks on during a military parade in northern Cyprus July 20, 2008. REUTERS/Andreas Manolis

More stuff from Oddly Enough

New laws against paparrazzi? Who needs them?  If celebrities just kept their clothes on, the problem might go away. Anyhow, Lindsay's got a girlfriend and Britney has cleaned up her act.

No, that's not a paparazzi photo agency talking. It's Los Angeles Police Chief William Bratton explaining why he boycotted a city council meeting on Thursday to discuss what should be done to clamp down on out-of-control photographers.

Bratton says there are enough laws already on the books to deal with agressive paparrazzi and no new ones are needed. And here's why.

"Half of this issue -- actually about 90 percent of the issue is that
celebrities should keep their clothes on,'' Bratton told Los Angeles' Fox11 television on Thursday.

"Paris Hilton's out of town, things are quiet; Lindsey Lohan's got a
new girlfriend, that's keeping things quiet; and evidently Britney has gone
straight now in terms of cleaning her act up, so basically paparazzi are losing
interest," Bratton said.

It's true. Compared to last year's  daily round of celebs in trouble, getting jailed, arrested,  checking in and out of rehab and generally making news for all the wrong reason, it's been relatively quiet on the Hollywood scandal front this summer.

And while that may be good for Bratton, it's definitely bad news for the paparazzi.

J. Crew is getting personal with an emailed mea culpa apologizing to customers who may have had "issues" while shopping online in recent weeks.

While the email's introduction sounds like a missing line from Sinatra's "My Way", it goes on to plead for patience. Humility is in fashion!

The apology also appears at the bottom of the company's home page.

Here is the full text of the email (lowercases included):  

we've made some mistakes....

(too many in our mind).

we want to say that we're sorry for any issues you have experienced while shopping J.Crew online or over the phone over the last few weeks -- we know we've let you down.

we are in the midst of making some enhancements to our web site and call center (and, unfortunately, encountered some bumps along the way). please bear with us as we work through these issues -- we know it's not perfect.

we appreciate your patience.

millard drexler, chairman and ceo

tracy gardner, president

(Photo: CNN/Money)

Soaring petrol prices and worries about global warming have convinced many motorists that now is the time to go green.

But if our heads have been won over, our hearts may take a little longer, to judge from a visit this week to the British International Motor Show in London.

    One stand, the Electric Vehicle Village, was devoted to, well, electric vehicles, designed to glide silently through city streets without emitting any polluting fumes. People were staring dutifully at the little plastic buggies on display.

    One of them was painted all over with green leaves, just to make the point. "A nasty little car", was the verdict of one man.

    A short distance across the hall, the Range Rover stand was playing host to a much more excited crowd. Visitors were scrambling all over the big SUVs and sitting contentedly in their plush driving seats.

    If these people were worried by the hefty amounts of CO2 that these "Chelsea tractors" emit, they weren't showing it.

    Are we ready to go green? The case has been made on sensible economic and environmental grounds, but who really believes that our love affair with the car is ever rational?

He has the same initials and plays in the same position so David Bentley will hope that his 15million pounds transfer to Tottenham will help him dislodge David Beckham once and for all from the England team.

The 23-year-old has never seemed short of confidence and the midfielder declared that he was ready to step up "to the next level" by leaving the homely surrounds of Blackburn Rovers after just two years for a return to London's bright lights.

Bentley, of course, began his career in the youth ranks at Arsenal, leaving the club after becoming frustrated by his lack of first-team opportunities. It is not often Arsene Wenger errs in his handling of young players but Bentley may come back to haunt the Arsenal manager if he shines for their north London neighbours.

"I grew up there but it is not a problem for me. My heart is at Tottenham now," Bentley told reporters after signing in at an otherwise nervous White Hart Lane.

Bentley supported Spurs as a boy and said he dreamed of emulating the feats of Paul Gascoigne in the white of club and country. Being at Tottenham has never harmed a player's England prospects in the past and Bentley is determined to grab his opportunity.

"It is entirely in my hands - it is up to me to perform," said a player whose impressive dead-ball skills and passing range from the right have earned him six England caps already.

More than once he has been quoted as saying he is ready to replace Beckham in the England team and now is his moment to deliver. If so, it could well be Bentley and not Beckham filling the No7 shirt on England's journey towards the World Cup in South Africa.

PHOTO: England's Bentley (l), Beckham (c) and Walcott stand together during a soccer training session in Port of Spain, May 30. REUTERS/David Moir

Check out the majority owner of Talbots exerting more control.

The women's apparel retailer, which has endured hardships in recent months including falling sales, job cuts, an executive departure and a credit problem, said on Thursday that Tsutomu Kajita would become chairman of its board.

Kajita is senior vice president of international operations for Japan's Aeon Co, Talbots' majority owner.

"The appointment of Mr. Kajita as non-executive chairman further signifies Aeon and its management's commitment and confidence in our continued success and ability to execute our long range strategic plan," said Talbots Chief Executive Trudy Sullivan in a statement.

Talbots is working hard to turn itself around after a string of fashion and merchandising missteps hurt sales of its classic fashions that target women over 35. The weak U.S. economy hasn't helped either.

There is a new design team, and early reviews are positive.

Lazard Capital Markets analyst Todd Slater said the company's new fall and holiday assortments were more "design driven" versus a "more traditional formulaic product development process."

"While we weren't able to preview entire floorsets, what we did see was more iconic, with the brand returning to its heritage, utilizing bold color (red), patterns (hounds tooth, plaid), directional fabrications (tweed), and iconic styles (the great white shirt, shift dresses, pea coats, totes, scarves and pearls)," Slater wrote in a research note on Thursday.

Jennifer Black, of Jennifer Black and Associates, waxed even more poetic.

"The collection in its entirety was everything we had envisioned and more.  The fabrics exuded quality.  The colors radiated the classic Talbots styling, the lines were clean and simple, and the styling was timeless.  The fall/holiday collection flows well together ... The fits have been modified for today's fashion style, but not changed as far as the fit specifications.  The waists on pants no longer cover the woman's ribcage; gone are the days of the ugly, baggy, boxy fits," Black wrote last week.

But Slater did have a warning for Kajita, whose company operates Japan's Jusco chain of general merchandise stores.

"Current expectations (are) likely too high. Management is focused on reducing
inventory, which should continue to lead to improved merchandise margins. However, we believe current trends remain below plan, and near-term expectations appear to be getting too high," Slater said.

Also in the basket:

GDP gets stimulus checks boost

Target offering Web customers installation services

CVS second-quarter profit rises

"The right step," Israel's most popular news daily screamed in red letters on Thursday across a front-page photo showing Prime Minister Ehud Olmert, his back turned, after he announced plans to resign.
 
Olmert's announcement on Wednesday triggered bold headlines and even bolder commentaries in the daily Yedioth Ahronoth in a climax to months of tensions over corruption scandals.

In a country of news junkies where emotions are raw and debate as hot as a mid-summer's day, Israeli dailies typically give expression to pent-up feelings almost as much as they seek to inform.
 
Global concerns about the future of Middle East peace talks were not the main focus. Speculating over the political impact of Olmert's downfall was more the order of the day.
 
"He couldn't take it any more," read the headline over a column on Yedioth's front page by Eitan Haber, a former aide to the late Yitzhak Rabin, once a rival of Olmert's felled by an Israeli rightist assassin who opposed peace talks.
 
"Olmert died in the war and was buried by the investigations," Yedioth commentator Nahum Barnea wrote in another piece, referring to Olmert's censure by an official panel for his handling of a 2006 war in Lebanon.
 
Some Israeli writers praised the dignified manner in which Olmert delivered his statement, quietly vowing to step aside and looking uncharacteristically humble in a speech broadcast live over radio and television.

Olmert protested his innocence, but his remarks bore little of the traditional mudslinging common in Israel's fractious politics. "He lost with honour," wrote Sima Kadmon, taking an unusually deferential tone.
In her article entitled "Not so fast," Kadmon, a veteran political journalist, wrote the complex political manoeuvring needed to form a new government or to hold an election may result in Olmert remaining in office for months to come.

Under Israeli law, Olmert stays on as caretaker leader for the weeks or months it could take to form a new government or hold an election. "Olmert has announced the end of his political career, but the ending may drag on, and he could end up staying on as premier through next February or March," Kadmon wrote.