The key to arguing for the pure libertarian point of view is that whenever you're presented with an example of the market failing, you figure out some minor way in which it is regulated, and blame that for the failure rather than the lack of stronger protections.
Apparently the key to arguing against libertarians is to attack libertarians using a straw-man, rather than trying to defend your own views on why it's a good idea for the federal government to interfere in free markets.
Or if a financial industry falls all over it's ass by making stupid bets left and right, it's not that the industry went wild taking on too many risks, it's that entitlement programs sent them the...uhh...implicit message that they should...lend money to people that will never pay it back..?
What implicit message? Fannie Mae and Freddie Mac were providing the money and incentives backing these risky loans, and were pushed in that direction by the government, so that everyone could buy a house, regardless of whether they could afford it. In addition, the federal government artificially lowered the lending rates between banks, further encouraging this behavior through cheap money.
When you've got cheap money, the government buying risky loans, and now -- a total bailout of this philosophy, why WOULDN'T you operate your company this way?
Imagine if instead of this, the government wasn't involved with the mortgage market in any way. If the cost of borrowing money was in line with the risk of lending it. If you knew that if your company failed, it failed, no bailout available.
Do you really think we'd be in this mess?