A sad exercise in being late to the party
"Our findings show that, in this new world of ultrafast robot algorithms, the behaviour of the market undergoes a fundamental and abrupt transition to another world where conventional market theories no longer apply."
Yeah well, I wonder in what kind of world these guys live when they think that in the world of QE Infinity and 70 billion dollar per month fresh money injections "conventional market theories" should apply anywhere outside the confused mind of NYT columnist Krugman.
The "machine wot done it" discussion is a rather old one. Here is Murray Rothbard on the crash of '87
Myth 3: The crash came about because of computer trading, which in association with stock index futures, has made the stock market more volatile. Therefore either computer trading or stock index futures or both, should be restricted/outlawed.
This is a variant of the scapegoat term "computer error" employed to get "people errors" off the hook. It is also a variant of the old Luddite fallacy of blaming modern technology for human error and taking a crowbar to wreck the new machines. People trade, and people program computers. Empirically, moreover, the "tape" was hours behind the action on Black Monday, and so computers played a minimal role. Stock index futures are an excellent new way for investors to hedge against stock price changes, and should be welcomed instead of fastened on--by its competitors in the old-line exchanges--to be tagged as the fall guy for the crash. Blaming futures or computer trading is like shooting the messenger--the markets that brings bad financial news. The acme of this reaction was the threat--and sometimes the reality--of forcibly shutting down the exchanges in a pitiful and futile attempt to hold back the news by destroying it. The Hong Kong exchange closed down for a week to try to stem the crash and, when it reopened, found that the ensuing crash was far worse as a result.
It wouldn't even matter if people were not forced to put their money into dubious stockmarket schemes just to "invest for their retirement", i.e. run the decidedly nonzero risk of being robbed blind by "investment" sharks while trying to avoid being robbed blind by bureaucracy sharks. (More on this: How the Stock Market and Economy Really Work)