There’s a simple Terminal command which will set the default to your local hard drive instead of the cloud, via iCloud. You can still save to iCloud; it just won’t be the first place that shows up when you hit “Save” while in a Text Edit (or other iCloud-enabled app).
To make this happen, launch Terminal from your Utilities folder, which is in the Applications folder. ONce Terminal app launches, type or paste the following command in:
defaults write NSGlobalDomain NSDocumentSaveNewDocumentsToCloud -bool false
The most important Defaults Write tip you’ll need in Mountain Lion.
Apple, you’ve tried your point. Can we go back to a regular sane OS now?