I used to think that the problem of information is that it turns homo sapiens into fools — we gain disproportionately in confidence, particularly in domains where information is wrapped in a high degree of noise (say, epidemiology, genetics, economics, etc.). So we end up thinking that we know more than we do, which, in economic life, causes foolish risk taking.
When I started trading, I went on a news diet and I saw things with more clarity. I also saw how people built too many theories based on sterile news, the fooled by randomness effect. But things are a lot worse. Now I think that, in addition, the supply and spread of information turns the world into Extremistan (a world I describe as one in which random variables are dominated by extremes, with Black Swans playing a large role in them).
The Internet, by spreading information, causes an increase in interdependence, the exacerbation of fads (bestsellers like Harry Potter and runs on the banks become planetary). Such world is more "complex", more moody, much less predictable.
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