Check this out in the WSJ, more sensible coverage:
High-Speed Traders Off Hook in Germany
For once, it isn’t the high-frequency traders taking the blame for a wild market ride.
Germany’s main exchange operator has found that a miniature “flash crash” in late August—in which stock-index futures dived 4% before recovering in a matter of minutes—was simply the result of a barrage of selling by financial institutions, and not the handiwork of superfast computerized traders.
… the initial glut of sell orders, submitted by “institutional clients” of Deutsche Börse, were entered “in small batches,” in keeping with big investors’ usual practice of fragmenting major orders, according to the report, written by Edward Backes, head of market supervision for Eurex, which is Deutsche Börse’s futures platform.
The “high market liquidity was in large part provided by the actions of the high-frequency traders, as these participants initially absorbed the major sell positions and then passed them on to protect the market,” Mr. Backes wrote.
Unlikely to see references to this article on the anti-HFT hysteria blogs. Wonder why? … LOL.