The jobs report released this morning, as reported by CNBC.com, is causing jubilation on Wall Street. Traders are excited about the news which is twice what conventional wisdom expected. Markets around the world are reacting positively to the news. If everyone is so happy why does my headline say Ouch?

Yesterday the Fed poured 41 Billion into the markets to shore up liquidity. The fear was that the markets would run into the same liquidity crunch they faced in August 07. Today’s news should have been that the Fed had made the largest infusion of liquidity since September 19, 2001. That infusion was made to combat market fears right after the attacks of 9/11. Today’s job report is so strong that traders are now saying, “credit crunch, what credit crunch?”

The simple fact is that good economic news is bad for the housing market. Two days ago the Fed made a 25 basis point reduction, which was widely expected. Conventional wisdom is that the small reduction signals that the Fed is more afraid of inflation than it is of the economy moving into a recession. Today’s job numbers, which have blown away expectations, is so strong the fear of recession has become greatly reduced. The signal to the Fed is clear. No more rate cuts will be required at this time. This is very bad news for the housing industry. The housing industry, facing a glut in inventory, free falling prices and margins is in desperate need of lower interest rates. Don’t look for any help soon. Ouch!