Being Played?

Bailouts are going to reckless Wall Street bankers, to homeowners over their heads and now maybe even to Americans hooked on credit cards. Where's the reward in doing the right thing?


If you feel like you're being played, you're not alone.

The financial crisis has deepened many people's suspicions that doing the right thing hasn't paid off. Instead, they feel it's made them chumps.

You see it in the "Where's my @#$%ing bailout?" T-shirts, the despair about plummeting retirement accounts and the hostile comments that greet every news story about mortgage restructuring or credit card forgiveness.

One reader put it this way:

"Doesn't keeping your promises mean anything? Most if not all of the people who snagged these (mortgages) were well aware of the risk and the responsibility. It kills me that I'm playing by the rules and bailing out those who were greedy, stupid or both."

Even when they're not directing their anger at anyone in particular, many of my readers feel like they've been led down the garden path.

"I am 62 years old and HAD been planning to retire in 5 years," one wrote. "Although I have lived frugally my entire life and put away 15% of my income every year in a retirement account, my balanced portfolio lost 60% of its value in the last two months."

What he wanted to know: Would he be a bigger fool for pulling his money out of the market now or staying in and possibly suffering more lumps?

If you have similar questions -- if you suspect you're being a chump for making your mortgage payments, paying your credit card bills and continuing to invest in your 401(k) -- read on. You're certainly not alone as you watch others exploit loopholes, mistakes and well-intentioned remedies.

Bailed out but still ruined
The question of why some homeowners are getting bailouts has really been answered by the financial turmoil of the past few months. A huge spike in foreclosures, magnified by derivatives cooked up by Wall Street firms, nearly brought down the global economy. As it stands, we're still likely to suffer one heck of a hangover in the form of a serious recession.

The foreclosure mess is far from over. Many of the riskiest loans -- the ones where homeowners weren't even paying all the interest that was accumulating on their loans each month, let alone touching the principals -- are just now resetting.