Worried about the honesty and effectiveness of the toy-screening conducted by major toy manufacturers and retailers? Zap 'em yourself with a Niton X-ray fluorescence analyzer, or XRF gun. That's what many consumer groups, including the Center for Environmental Health and HealthyToys.org, do in the continuing struggle to keep dangerous toys off retailer's shelves. The handheld guns go for $25,000 and emit mini x-rays which strike the toy; the "elements in that sample emit return rays with frequencies that indicate which elements are present and in what amounts."

Retailers and manufacturers are not pleased, contending that such guerilla testing is a poor manner of assessing a toy's safety. But the XRF gun is what the CPSC itself uses to test toys, which consumer groups point to as evidence that the technology is appropriate. (The CPSC goes on to send toys that read hot to a third-party laboratory for verification.) And anyway: this manner of testing actually uncovers toys which are toxic, much better than the CPSC's old strategy: go to stores, and look for the ones with bright colors (more likely to be tainted with lead). A comparison of the two strategies showed the XRF gun screening to have a far higher discovery rate, though of course many items that had high readings on the XRF gun were shown to be safe after further lab testing.

But who wants consumer advocacy groups out looking for bad toys? Certainly not the toy companies, who can only stand to be hurt by the increased scrutiny and "fear-mongering." In a column published earlier today I wrote about my concern over the fate of small toymakers given the impending effective date of the CPSIA. I can't exactly shed big tears, then, for the bigger manufacturers and importers who might be hurt by the discovery of toxins (even if the alarm bells ring a bit too loudly and too soon). The two manners of dealing with the toxic toy issue -- attacking it in the streets with ray guns, or clamping a shackle of expensive testing around each toy before it hits the market -- both seem wrong-headed, one too reactive, the other too proactive. Isn't there a better middle ground?

According to the New York Times, "Kmart said yesterday that it would remove all jewelry advertised as 'lead free' from its shelves after workers at lead monitoring programs who tested the pieces found that some actually contained high concentrations of the metal."

One charm labeled lead-free was 52% lead. What is interesting here is that it raises questions about how much responsibility companies have about products that they source from third-party manufacturers.

Lululemon Athletica Inc. (NASDAQ: LULU) ended up embroiled in a minor scandal after a New York Times piece found that products the company was selling (the material in question was manufactured by a third party) -- labeled as containing seaweed -- actually contained no seaweed. While it sent the stock down as much as 9%, the share price ended up closing higher on the day of the story. Lululemon has since put out a press release refuting the New York Times claim, saying that its products actually do contain what they say they contain.

The legal issues could be murky. But these companies know that consumers aren't going to want to shop at stores in which products are labeled in a misleading way, and so they're taking steps to evaluate manufacturers' claims -- before the New York Times does.

Is it time to start selling your Mattel, Inc., (NYSE: MAT) stock? In Yet Another incidence of Fisher Price toys being tainted (figuratively and literally) with lead, Amazon.com (NASDAQ: AMZN) has pulled the Fisher Price Medical Kit from its web site after a Consumer Reports article that questioned the lead content in the kit's toy blood pressure cuff. Mattel has insisted that children can play doctor safely because the toy "meets the requirements set forth in the federal regulations and international consumer product safety standards, including the existing standards for lead content." Note Mattel did not claim that the toy was free from lead.

As I've mentioned before, these toy recalls have lead (har!) me to the conclusion that it's just not worth buying plastic toys for my children any more. I've been flipping through the Nova Natural catalog to plan for holiday buying and regularly carting off boxes of my boys' plastic toys to Goodwill.

Judging by the excitement over leaked Black Friday ads, it seems as if I'm a rarity. This news does bring out a couple of questions, however:

• Will we soon start seeing vigilante recalls like this one from Amazon.com as retailers work to minimize their risk in toy recalls?
• Does it cost enough to effect a recall that it might make sense to anger a major supplier like Mattel?
• Isn't this recall just a little bit too ironic? My blood pressure is rising, too!

Answers would be appreciated; though of course my biggest question will remain unanswered for some time, ergo, how long will consumers continue to put up with unsafe products?

Lead scares have moved from toys to lipstick. If you use L'Oreal or Cover Girl lipstick you could be exposing yourself to lead levels the Food and Drug Administration does not allow in candy, according to a study by the Campaign for Safe Cosmetics (CSC). L'Oreal is based in Paris and Cover Girl lipsticks are marketed by Proctor & Gamble (NYSE: PG).

The Campaign for Safe Cosmetics said 20 of 33 brand name lipsticks had detectable levels of lead. The FDA is now conducting its own tests, but the agency spokesperson told Bloomberg News that it has not found dangerous levels previously.

CSC said they found lead levels ranging from 0.03 part per million to 0.65 part per million, which Harvard environmental epidemiology professor Joel Schwartz told Bloomberg can have the potential to increase risks of health hazards. Long term exposure to lead can result in higher blood pressure, kidney damage and loss of mental function.

In fact, CSC found that one-third of the lipsticks tested had lead levels that exceed the FDA's 0.1 per million limit for lead in candy. The products with levels exceeding 0.1 part per million included L'Oreal's Colour Riche True Red, Cover Girl's Incredifull Lipcolor Maximum Red and Maybelline's Moisture Extreme Cocoa Plum.

CSC wants cosmetics companies to test their products for lead. They also asked companies to require suppliers to guarantee that raw materials are lead-free. Neither seem to be outrageous requests.

How much of an impact will this have on P&G stock? Don't expect to see much yet, but if the FDA confirms CSC findings, P&G's stock will take a hit.

The headaches for Mattel, Inc. (NYSE: MAT) just keep on adding up, as the company's toys from this summer's recall have now been found to contain 180 times the amount of lead allowed by law. In addition, some jewelry sold by Oriental Trading Co. was found to have an ingredient mix that was 100% lead. That's positively alarming. 180 times the legal limit? Did Mattel's Chinese toy contractors dip all the toys in pure lead or something?

For China, this is not good news, although the brunt of the negativity will be taken in by Mattel. After so many product and food recalls from China in the last year, it's hard to imagine that exports from that country won't be under the heaviest scrutiny by a congressional subcommittee. If you're a parent and your confidence in the quality of those Barbie toys (and others) has not been shattered by all this, I'd love to hear your comments below.

After Mattel (NYSE: MAT) announced its first huge lead-based paint recall spanning dozens of my children's favorite toys, from Diego to Elmo (how could you?), my initial response was something along the lines of: no more Chinese toys, ever! After the second recall, largely focused on Polly Pocket dolls (I have boys but still, Polly Pocket is hard to resist) and choking hazards, I went even further and darkly considered removing the plastics from my family's consumption altogether -- more than one friend made that decision, too, putting plastic toys and Tupperware in garbage bags and divesting entirely.

Late last night, Mattel announced yet another recall, this one not quite so big as the others and focused largely on small parts of Barbie accessories -- the dog from the Barbie Dream Puppy House; the cat from the Barbie Dream Kitty Condo; the dog and dinner plates from the table and chairs kitchen playset -- as well as a few toddler toys, two GeoTrax trains and the lid from a bongo drum in a Big, Big World playset. And I? Had almost no reaction. I didn't frantically root through my children's toy boxes, searching for toxic toys. I didn't email all my friends, using a subject line with several exclamation points. I didn't call my pediatrician's office to schedule a blood lead test (ok, so I've already done that). Mattel, I've decided, isn't the bad guy here; nor am I quite as angry at China (even though I'll admit to a greatly heightened blood pressure when I heard that a Chinese government official objected to lead limits in children's jewelry).

The thing is, while I've decided to severely limit my consumption of plastic children's toys, this isn't about them anymore.

In an effort to better understand the lead-in-toys scandal, I had a chance today to talk to an industry expert on the topic. Dr. Marcia Stone holds a Ph.D. in Organic Chemistry and is Founder/President of Hybrivet Systems, a manufacturer of lead-testing equipment for industry and home use. She has worked in the lead testing field for 15 years.

I asked Dr, Stone why manufacturers would use lead paint? She explained that "Lead in paint provides a hard, glossy, pretty finish, the reason it was once used extensively in expensive housing. Leaded paint is also easy to work with and inexpensive."

What lead-containing products have you found on American shelves that consumers should be concerned about?
"The scandal over lead in children's jewelry is not over; we continue to find these products for sale," said Stone. She told me manufacturers will use a core of lead in cheap jewelry and cover it with nickel plating or paint, or use a solder containing lead in its construction. Children often chew on their jewelry, and as little as three milligrams of lead, about the size of three grains of sugar, can kill a child. Since lead has a sweet taste, the propensity for children to ingest it is even greater.

Mattel Inc. (NYSE: MAT) opened at $22.60. So far today the stock has hit a low of $22.10 and a high of $23.14. As of 10:40, MAT is trading at $22.73, down 0.84 (-3.6%).

After hitting a one year high of 29.71 in April, the stock has been sliding over the past few months. Shares are dipping more still today after the toymaker announced that it is recalling an additional 8.8 million Chinese-made toys on lead paint concerns. With trouble like this and potentially more on the way, its hard to imagine this stock going up by too much over the next few months. Technical indicators for MAT are bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a January bear-call credit spread above the $30 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk and leverage returns. For this particular trade, we will make a 4.2% return in just 5 months as long as MAT is below $30 at January expiration. MAT would have to rise by 31% before we would start to lose money. Learn more about trades like this one here.