And that's why I feel that even if regulation isn't perfect, and even if it sometimes is counterproductive (which it is!), it can often help to stave off such things as this.
It didn't prevent it, but the lack of it sure contributed greatly to it all.
The biggest single example: the exempting of the four largest investment banks from the previous 12-to-1 leverage rules, allowing them to leverage up to 40-to-1, thus greatly exacerbating the fallout and causing further follow-on crises.
That, among many, many other things, would not have occurred without those IBs being exempted from previously-existing regulation.
Do you really believe non-regulation will be the panacea for all these ills?
Somalia is pretty unregulated. Maybe try your luck there.
On the other hand, if I were running a company and I knew that my buddies in Washington would end up bailing me out with other people's money because I'm "too big to fail", I would be a fool not to take as much risk as I can. With state capitalism, you can have your cake and eat it.
For the most part, the greediness of people is why we had such ridiculously leveraged financial securities and special-purpose vehicles etc. designed to stuff as many fistfuls of cash as possible into the pockets of those who could game the system the best.
Greed was the cause, and insane levels of leverage were the flimsy supports for this recent collapse of the financial house of cards.
Of course, that's not to say leverage is inherently bad, but in excess it clearly points the way to financial ruin.