The US Federal Reserve announced its latest 0.25% cut in the Federal Funds rate overnight, but like a bunch of drunks on a bender, the desperates on Wall Street wanted more.

And in their displeasure, they forgot their manners as they knocked the Dow down more than 340 points in less than two hours of trading following the announcement.

Wall Street had convinced itself of the need for a bigger cut, even though the future market was signalling 0.25% was the best they could hope for, and some secretly thought the Fed would  bail ’em out again, just as it did with a surprise 0.50% cut in September.

The Fed has now cut official rates by a substantial one per cent since September, but the balance sheet desperados in the banks, brokerages, state governments and others with dodgy subprime investments want more to ease the pain of facing up to their self made disaster.

The Fed looked at a 0.50% cut, and one of the members in yesterday’s Open Market Committee meeting did vote for a larger cut, but those better than expected jobs figures on Friday look like they tempered the rate-cutting zeal and not even the bail out of UBS and the bond insurer MBIA or the search for new capital by Washington Mutual (America’s biggest savings and loan bank) swayed the Fed’s decision.

The Dow was off 294 points at the close — down 2.14% — one of the biggest falls of the year. Bigger falls were taken on the S&P 500 (off 2.53%) and NASDAQ (down 2.45%). “Free Fall after Rate Cut” said CNNMoney’s headline.

The US dollar was mixed but our dollar plunged nearly 1.50 cents to end at 87.18 USc.