AssetBuilder's Scott Burns: Four Reasons Why Wall Street's Current Crisis Is Not the End of the World

Consumers will pay down their debt. "With bank equity impaired, borrowers will become the Rodney Dangerfields of finance. They'll get no respect, and no money," Burns says. "Personal borrowing will be paid down because banks will require it from all but their most qualified borrowers -- those who don't need to borrow. Dollars not spent on interest can be spent on goods and services. Expect to see a long decline in consumer borrowing as a percent of income. With consumer debt approaching $2.6 trillion, that's a very good thing."

The recessionary impact of consumer belt-tightening will be alleviated by our reliance on foreign goods. Explains Burns: "Economists generally fear that a decline in consumer borrowing inevitably leads to recession because one family's consumption is another family's job. We import so much, however, that our recession may be blunted. Much of our woe will be exported to the countries making the goods we won't be buying."

Americans who can't afford to own a home will return to renting - which they should have been doing all along. "The current crisis can be traced to a government policy of the early 90's: Expand access to home ownership by reducing lending standards. It seemed, as they say, like a good idea at the time," Burns says. "Watch for a resurgence in renting as millions of households consider the real risks of home ownership. Home ownership is a great thing, but it isn't for everyone."

Individual investors will stop wasting money on Wall Street's discredited full-service brokers. "People are moving their money away from the major brokerage firms. Merrill, according to reports, had $5 billion in client assets leave in the second quarter. About $11 billion left Smith Barney. And $17.6 billion left Wachovia," Burns says. "Where did the money go? Fidelity Institutional holds money managed by thousands of independent advisers. It picked up $16.7 billion in the same quarter. Schwab Institutional added $14.5 billion. This means that investors will be exposed to less financial garbage in the future."