The troubles in the financial markets over the last year will lead to a new era of thrift, and this will be radically different than the past 20 years of excesses as consumers change their habits. Consumers are already retrenching and increasing their savings amongst the economic uncertainty, but I think these changes portend an even deeper shift in personal behavior.

This is a story of three successful "40 somethings" who are cutting back not because they have to but because they want to. They have given up on the markets -not because of losses - but because it has failed them. These people are cutting back because they sense a long period of economic malaise that won't be fixed by increased spending or a new bailout program. And they believe that the economic malaise and dislocations will result in opportunities far off in the future, and they want to be in position, with cash on hand, to take advantage.

Tom is a mergers and acquisitions lawyer who made over $300,000 in 2007. He started his own firm in 2008, but looking ahead, he projects that his billings will be down, and he expects to be making about two thirds of what he used to make. Furthermore, being the only boss is losing its appeal. Tom is looking to downsize. He is going to merge his firm with another, and he is moving from a bigger house to a smaller one. Even though he lost over 50% of his net worth last year, he knows that he could ride out the storm, but what is the point. Tom can live a lot simpler without all the stress, and he never wants to put himself in that position again where his financial well being is dependent upon others. Tom is pulling back on his spending and his investments not because he has to but because he wants to.

Pete is a children's dentist with significant and stable investments in rental properties. He really hasn't taken a hit on his income from the practice or his investments. Pete is cutting back because he has too much on the table; his balance sheet is leveraged more than he would like especially when he considers the prospects for the economy. Pete doesn't have to downsize but he wants to because he wants to improve his cash flow.

Steve is a successful physician with a stable salary. In fact, Steve's wife also is a physician, so they have two very stable salaries. Yes, they lost in last year's market, but with 15 years of productive work life ahead of them, they are not too concerned. While retirement is far off, Steve and his wife see the current economic dislocations as an opportunity to plan for the future. They would like to buy a retirement home with a view of the ocean. Prior to 2008, this was just a silly notion, but maybe, just maybe, they now think it is possible. Of course, this will require savings, which means they will be cutting back too.

So there you have it. Tom is downsizing to simplify his life. Pete is cutting back to improve his balance sheet. Steve is saving more because he recognizes that the current dislocations in the economy will create opportunities. These folks don't have to cut back but they want to, and this dynamic isn't recognized by the pundits on Wall Street. If you listen to CNBC, you get the sense that all our ills will be solved by one more bailout or if not one more, than the right bail out. I got news for you: that game is over. It doesn't matter anyway, I believe the dynamic has shifted in this country from spenders to savers.

Furthermore, the financial pundits seem to imply that savings is only for those on the bubble - those who have lost a job or might lose one as they are downsized by their company. But what I see and hear is that financial prudence is for those who have the means as well and have been somewhat immune to the recession. There is no question that people are cutting back, and it just isn' t people who are on the bubble or who live their life in fear. People with means are pulling in their horns too.

The financial markets have failed investors. There has been a tremendous transfer of wealth from Main Street to Wall Street. Investors have made "bubkus" in this decade, yet CEO's and insiders have made millions for driving their companies into the ground. Wall Street has done little for shareholders. Tom, Pete, and Steve recognize that if they had acted so irresponsibly in their professional lives they would have lost their right to practice medicine or law. They are disgusted with the markets and bailouts to help those who acted recklessly and irresponsibly. They have turned a deaf ear to the financial pundits who clamour on about the need for just one more bailout to fix everything. Tom, Pete and Steve are taking matters into their own hands. Wall Street matters little as the wheels for a new era of thrift have been set in motion.