This thread is in serious need of definitions for the words: "faith," and "arbitrary."
"Faith" is a belief held without reason. To say that we accept the evidence of the senses "on faith" is a stolen concept. Faith would be accepting something without evidence. In the case of the evidence of the senses, well, did you happen to notice that word, "evidence" in there?!?
"Arbitrary" is the category for claims that have no evidence for being true, but also cannot be proven false. Dr. Peikoff correctly argues that the arbitrary is not to be treated as possible, but to be utterly ignored. The arbitrary is that which could exist, but does not have a shred of evidence to suggest that it does exist. To accept, or even entertain, the arbitrary would be an act of faith, since it would be acting without evidence.
Your friend has it completely backwards: he is the one operating on faith, not you.
If you operate under the premise of giving thought to the arbitrary, I could think of a million billion arbirtary assertions and keep you eternally occupied. ("There is an invisible dragon on the far side of the moon." "Every time you belch, you give birth to a tiny, undetectable galaxy in an alternate universe.")
Are you familiar with the "Flying Sphagetti Monster" argument?
Inspector got a reaction from Easy Truth in "How do I know I'm not in the matrix?"