my guess is that the market looks like that all the time -- the things it describes sound like reasonable automated market-making strategies that people would t

my guess is that the market looks like that all the time -- the things it describes sound like reasonable automated market-making strategies that people would try. market making is certainly a job that needs doing, and high-frequency trading is a way that people can do it; like any system, there's some risk of a breakdown. it's a game like poker, where you've got to guess what the intentions of the other guy are. honestly I'm not worried about the high-frequency traders, I'm worried about the longer term expectation that investors have, and about a general inbalance between capital that exists on paper and the ability of the system to put it to work