Hey funky read this and thought of some of your posts:
http://www.highfrequencytraders.com/blog/909/hft-not-responsible-market-volatility-%E2%80%93-you-are
...........volatility reflects one thing and one thing only - markets react to news, and since 2007, there has been an abundance of news which has caused investors to panic.
Volatility is caused by panic behavior. Computers don't panic, humans do. Virtually every academic study on the topic has concluded that the effect, if any, of high-frequency on market volatility is to lower it........
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