1. The packaging and resale of risky sub-prime debt as AAA credit, by basically wrapping up the sub-prime bits in off-balance sheet entities.  This resulted in the massive distribution of debt into the world financial system, to the point where it was impossible for the owners of debt instruments to understand and manage their own risk (and therefore, their liquidity as well).  Remember, most of the crash in value wasn't because anybody ran out of money, it was because they had no way to evaluate and put a dollar value on the risk they had in their holdings, and so nobody could responsibly buy, sell, or borrow anything related to that unknown risk factor.
2. Off-balance-sheet accounting in general (lack of accounting transparency means you can't know the price of a thing).  THAT's what made all this collateralized debt fraud possible, it brought you the failures of Enron, Tycho, WorldCom, and it's an obstacle to transparent or efficient distribution of reliable financial data.
3. The federal budget deficit and debt (weighs heavily on credit markets, adds risk, makes it more expensive for the federal government to borrow, exposes the dollar to risk of a run on it if investors think the risk:reward ratio is poor).

These are all functions of financials, not of the underyling real economy (which, given the real economy's dependence on financial services, is doing surprisingly well).  I think we can address these problems much more effectivley by regulating the financial sector in ways that are related to their fundamental excesses, rather than by going after the mechanisms by which we all price risk and plan against uncertainty.

http://www.bad-money.com/excerpt

Here's an excerpt from a book I've been off-and-on reading for a little bit, which frames the issue pretty well- a lot of today's financial woes can be seen as a function of the wrong regulation, the institutionalization of specific industry (like the financials) in US policy strategy, the resulting bloat in debt and credit markets, and the systemic way we've taken the risk out of risk- taking in the financial sector.  Add it to your reading list.