  An electro-optical feedback loop can make in-loop light (squashed light)
which produces a photocurrent with noise below the standard quantum limit (such
as squeezed light). We investigate the effect of squashed light interacting
with a three-level atom in the cascade configuration and compare it to the
effects produced by squeezed light and classical noise. It turns out that one
master equation can be formulated for all three types of light and that this
unified formalism can also be applied to the evolution of a two-level atom. We
show that squashed light does not mimic all aspects of squeezed light, and in
particular, it does not produce the characteristic linear intensity dependence
of the population of the upper-most level of the cascade three-level atom.
Nevertheless, it has nonclassical transient effects in the de-excitation.
