I was a tad surprised at this news, but in retrospect I shouldn't have been.

"WASHINGTON (AP) -- Nationwide home prices in July fell a record 5.3 percent compared with a year ago, a government agency said Tuesday, and have now receded to October 2005 levels."

That is it. Prices have returned to late 2005 levels. With all the wailing you would have thought we had returned to 1980's levels.

Home prices fell 5.3 pct in July, gov't says: Financial News - Yahoo! Finance

Hey, that means all those people who bought homes in 2005 and 2006 with 80% held by Freddie and 20% in a balloon mortgage in a GSAMP trust sold by Goldman Sacks, when Paulson was CEO, can easily be refi'd into a new low interest 30 year fixed mortgage for the 80% Fannie first, the 20% variable balloon, plus the costs and points rolled into a new Freddie loan on 80% of the new house market price, preventing the second mortgage from going into default.

Oh wait, the price was supposed to rise 25% to make that Goldman Sacks innovative get-the-poor-unemployed-single-mom into their own 3000 square foot home.

And everyone knows Barnie Franks thinks CEOs should be highly compensated with really big bonuses so innovators like Paulson will push for more great ideas like GSAMP Trusts to put people into loans they will default on.

Its all Barney's fault for calling for much higher CEO bonuses!