In fact, home prices showed so much improvement that we have to wonder if they’ll really fall another 5% to 10% this year as some experts have projected.

The national median price of a home in the fourth quarter of 2009 was $172,900, down 4.1% from a year ago — far better than the 13.8% loss in late 2008 when the financial crisis struck.

(A median price is where half the homes sold for more, the other half for less.)

Fewer cities suffered the kind of double-digit declines that were so common during the recession — and put about one-in-five borrowers underwater on their mortgages.

Almost half of the markets the Realtors surveyed (67 of the 151) actually had higher median home prices, more than double the 30 cities that recorded price increases in the third quarter.

Prices in Akron, Ohio, for example, were 22.8% higher than a year ago, and in Cleveland they’re up close to 25%. Property values in Springfield, Ill. are more than 15% higher than they were in the fourth quarter of 2008.

Most of the places where prices continue to post big declines are in those states where the housing bubble was the biggest — Florida, Nevada, Arizona and California.

Las Vegas, Nev., for example, saw a 23.3% decline last year to a median price of $139,400 from $181,700 the year before.

Click here to find out how home prices are changing in your area.

When the Fed Chairman might set that plan into motion remains a mystery.

Economists who thought June might be a good guess are now saying November or even next year since he seems determined to hold interest rates ridiculously low for as long as he possible can.

The plan also has a surprising twist that makes us worry about how quickly the horrible rates on CDs, savings and money market accounts will improve after the Fed finally decides to act.

For more than three decades the Fed has controlled short-term interest rates through what’s called the federal funds rate — the rate it allows commercial banks to charge one another for overnight loans.

Lowering that rate to 0% certainly played a big role in driving interest rates on loans and consumer deposits to the record lows we’re seeing today.

But Bernanke says he’s going to reverse that process by boosting the interest rate banks are paid for keeping excess reserves on deposit with Fed, which is currently 0.25%.

Increasing that rate would supposedly give the banks more incentive to keep their money parked at the Fed, reducing the amount they have to lend and driving up the rates for all sorts of consumer and commercial loans.

Raising any of the Fed’s short-term interest rates would supposedly lead to higher interest rates on all types of deposits.

But we’re about to enter uncharted territory here, and no one really knows how much, or how fast, an increase in the Fed’s rate on excess reserves will trickle down to savers.

In our opinion, allowing us to earn a reasonable return is pretty important given the beating we’ve taken from the Fed’s current policy.

Average returns on 3-month, 6-month, 12-month and 24-month CDs crashed to new record lows in this week’s Bankrate survey.

Let’s not kid ourselves.

Bernanke has done everything he can to save the big banks from their own irresponsible lending by denying millions of hardworking Americans anything approaching the market rate their savings deserve.

Thanks to the Fed’s policy Chase Bank can pay a pitiful 0.05% APY on its savings accounts while JPMorgan Chase Chairman and CEO Jamie Dimon took home $17.6 million in total compensation last year.

Does that seem fair? No it does not.

Now Bernanke seems more concerned about pulling the $1.1 trillion the Fed pumped into the economy to fight the recession before that stimulus causes inflation to soar out of control.

We can only hope that savers aren’t the last to benefit from Bernanke’s plan to return the economy to a more normal, market-driven state of affairs.

Whenever that may be.

Don’t believe it.

The turnaround banks are touting is only possible because they’re still refusing to acknowledge all of the bad loans on their books.

So far, banks have written off about $600 billion in losses from the housing bubble and recession.

Estimates that we’ve seen from banking industry analysts project their true losses to be anywhere from a merely disastrous $1.6 trillion to a truly staggering $3.8 trillion.

So in the best case scenario, banks have acknowledged only about one-third of the losses they’ve suffered. In the worst case scenario they’ve dealt with a paltry one-sixth of those losses.

The losses banks are refusing to write down dwarf the profits they’ve supposedly made since the financial crisis struck in late 2008.

Allowing overvalued loans to remain on the books was part of the Federal Reserve and Treasury Department’s effort to save the nation’s banking industry from collapse.

But that policy is now working against the government’s push to get banks lending again.

The Fed is providing banks with virtually all of the free money they could possibly want. (It does that by making short-term loans to commercial banks for 0% to 0.25%).

That’s why banks don’t need our deposits and continue slashing interest rates on all types of savings to record low after record low.

Yet the banks will never respond to the Fed’s incentives and make new loans when they still have so many bad loans on their books.

So the Fed needs to get tough and make the banks acknowledge all of their overvalued assets now, even if it means they’ll have a couple of unprofitable quarters this year.

It’s a critical step towards getting the banks to lend again, getting the Fed to stop driving down interest rates, and getting decent returns for millions of savers.

That’s the real road to recovery.

But for the past year the Federal Reserve has been providing commercial banks with an almost limitless supply of free money in the hope that they’ll make lots of new loans and help boost the economy out of the recession.

(Its rate-setting committee is doing that by charging banks 0% to 0.25% for overnight loans.)

Yet the banks are extending precious little credit to consumers. To small businesses. To anyone.

Could it be that Fed Chairman Ben Bernanke has pushed conventional economic wisdom too far by driving interest rates too low?

The Fed is making money so cheap that banks can turn a profit by simply parking it in Treasuries without making any of the effort, or taking any of the risk, involved in making loans.

If Bernanke made banks pay more for their deposits it might negate that strategy and force them to seek better returns by making more loans.

We know, we know. There are lots of reasons banks are not lending money. It’s risky business in this economy and there are still billions if not trillions of dollars worth of bad loans banks haven’t even begun to deal with.

But before President Obama hauls bank presidents back to the White House for another scolding, maybe he and Bernanke should at least try a modest rate increase.

What do they have to lose? And the millions of savers who have suffered so grievously from the Fed’s cheap-money policy could use the break.

How could that be?

We’re in the middle of a recession that drove General Motors and Chrysler into bankruptcy and caused new car and truck sales to plunge from about 17 million a year to fewer than 10 million.

Yet buyers are paying very close to sticker price for many new models, and used car prices and 9% higher than they were last summer.

For new cars and trucks, the problem is supply.

When the recession whacked sales, dealers dramatically reduced the number of cars and trucks they ordered, and the car companies closed their assembly plants for weeks at a time.

By July 1, Automotive News said the inventory of new cars and trucks was already one-third lower than it was this time last year.

Then along came “Cash for Clunkers,” the government program that pays up to $4,500 for older, fuel-thirsty vehicles that are traded in for newer, more fuel-efficient cars and trucks.

It was wildly successful, resulting in 250,000 purchases in just one week. One Illinois dealer told us he’d been open until midnight every day just to keep up with the demand the clunker program created.

July was the best month for car sales this year and Congress has extended the clunker program through Labor Day.

As a result, most dealerships have acres of empty lots and no reason to dicker over the few models left in their depleted inventory.

You’ll also find fewer, and less lucrative rebates, are available as well.

Inventories are so low that Chrysler, which had a huge backlog of unsold cars and trucks this past winter, is actually reducing its rebates and cut-rate financing on several models.

Although Automotive News reports that automakers are ramping up production to replenish the supply, the extension of Cash for Clunkers will have them playing catch-up at least well into the fall.

The story is much the same for used cars.

Automotive News says used-car prices were 9% higher in June, over June 2008.

The dramatic decline in new car sales means fewer trade-ins are finding their way into the system and rental car companies are also keeping vehicles longer, further reducing the number of low-mileage, late-model used cars and trucks that most used car shoppers want.

They point an accusing finger and proclaim the $750 billion economic stimulus spending plan President Obama and the Democratic Congress approved last winter is a total failure.

But can we really say that — or more importantly, know that — after only a few months?

No.

Let’s put aside the considerable hypocrisy in these attacks.

If the Obama haters had their way, the government would have stood aside and let market forces try to pull the economy out of the worst financial crisis since the ’30s. Unemployment would have been no better — and probably worse — than it is today.

It’s simply too early for any rational, fact-based analysis.

There are some good reasons to wonder how effective the stimulus will be. Liberal economists, for example, have repeatedly said it isn’t big enough for the size of the crisis.

Thomas Mann, a senior fellow at the Brookings Institution in Washington, summed up this “ridiculous” rush to judgment better than I possibly can.

Here’s what he wrote recently on Politico:

Let’s get a grip on reality. We are mired in the deepest global economic downturn since the Great Depression. Extraordinary steps taken by the United States (starting at the end of the Bush administration with TARP and extended under Obama) and other countries appear to have averted a complete financial meltdown. Fiscal stimulus plans put in place by governments around the world also seem to have warded off a downward cycle of deflation and depression. Having avoided these twin disasters, the U.S. and global economy nonetheless are a long way from unwinding the housing bubble, highly leveraged financial positions, and huge global imbalances. As a trailing indicator, unemployment will almost certainly increase over the next year and be slow to return to pre-recession levels.

Drawing conclusions about the efficacy of the Obama stimulus four months after its passage is ridiculous. Arguably it should have been larger and involved even more transfers to fiscally-strained states but a small group of Senate centrists, whose votes were needed to shut down a filibuster, made that impossible. Under pressure from Republicans and moderate Democrats, the stimulus also relied more heavily on tax cuts than was justified, given the tendency of households to save such rebates in times of economic peril. But the dollars are beginning to flow more rapidly in ways that will almost certainly hold unemployment below where it would otherwise have been. What the administration forecast in January is beside the point. Does any serious analyst believe that we would be better off without the stimulus or by converting all spending plans into additional tax cuts?

The Car Allowance Rebate System (as it’s formally called) runs through Labor Day.

If you qualify, the rebate is incredibly easy to get. The dealer does all the work and deducts the rebate from what you owe on the car or truck you’re buying.

Here are the basic rules:

• The car or truck you’re trading can’t be older than a 1984 model (although there are slightly different rules for larger trucks).
• It can’t have a combined fuel-economy rating of more than 18 miles per gallon. To see if your vehicle qualifies, go to fueleconomy.gov.
• The vehicle must be drivable, and legally owned and insured by you for at least one year.
• The sticker price of the new car or truck can’t exceed $45,000.
• The combined fuel economy estimate for the new vehicle must be at least 22 m.p.g.
• Your new car or truck must get at least 4 m.p.g. better than your old one. If the difference is between 4 m.p.g. and 9 m.p.g., then you’ll qualify for $3,500. If the difference is 10 m.p.g. or more, you’ll get a fat $4,500.

The rules are a little different if you’re trading a pickup, sport-utility vehicle or van in on a similar vehicle.

For small pickups, SUVs and minivans (which are considered “Category 1″ trucks in the CARS program), the traded vehicle’s fuel economy cap is the same as for cars, 18 m.p.g.

But if you’re buying another Category 1-type vehicle (trading a clunker minivan for a new minivan, for instance), the new vehicle only needs to get 20 m.p.g. to qualify for the program.

If it gets 2 m.p.g. to 4 m.p.g. better fuel economy than your old truck you’ll qualify for a $3,500 rebate. If the difference is 5 m.p.g. or more you’ll qualify for a $4,500 rebate.

“Category 2 trucks” are mainly full-size pickups and vans.

If you have one of these, you don’t have to worry about the 18 m.p.g. cap. They’re all eligible for the program.

But if you’re replacing an old Category 2 truck with a new Category 2 truck, the new one has to get at least 15 m.p.g. and deliver a 1 m.p.g. improvement to qualify for the $3,500 rebate and a 2 m.p.g. increase for the $4,500 rebate.

The National Highway Traffic Safety Administration is in charge of the CARS program and has created a Web site called cars.gov to answer questions.

Stewart showed a collage of clips from as far back as 2006 in which Schiff warned the economy wasn’t sound and predicted the collapse of the housing market would cause a serious recession, to the guffaws of other experts and anchors on CNBC and Fox News.

“All the profits people have in real estate are going to vanish,” Schiff said, and “…It’s not just subprime, it’s the entire mortgage market.”

“Well you’re simply wrong about that,” celebrity economist Ben Stein told him.

Uh, sit down and shut up, Ben.

Of course Schiff spends much of his time criticizing the government’s meddling in the economy.

I’m not sure I buy Schiff’s argument that we’d have been better off not to bailout all of the banks that caused the financial crisis with their stupid lending.

Federal Reserve Chief Ben Bernanke says that would have caused a cataclysmic economic meltdown and Great Depression II. (The panic that followed Lehman Brothers’ collapse lends lots of credence to that fear.)

But you sure can’t argue with Schiff when he lays part of the blame for the financial crisis on Bernanke’s doorstep.

“The Federal Reserve has kept interest rates artificially low, and that has encouraged reckless consumption and reckless borrowing,” Schiff says. “If the Fed would get out of the way and let the market set interest rates, interest rates would have been a lot higher all along. And higher interest rates would have discouraged borrowing and rewarded savings.”

Amen.

Federal Reserve chairmen do not do interviews.

But Ben Bernanke broke with tradition and did a long interview with CBS reporter Scott Pelley for “60 Minutes” last night. (Click here to watch the first part of the interview)

His message: If the federal government hadn’t bailed out the nation’s banks, and insurance giant AIG, we’d have fallen into a second Great Depression.

“I thought we were pretty close to a global financial meltdown” last fall, Bernanke says.

“How much danger was there?” Pelley asks. “How close a call?”

“It was very close. It was very close,” Bernanke replies “The Congress passed the bill that gave Treasury the right to put capital into the banks the first week in October. And it was in the second week in October that the crisis reached its peak. If we’d not had those powers we could have had a much, much worse outcome. So it was a very dangerous situation.”

For an understated academic like Bernanke, that’s the equivalent of setting his hair on fire.

He says the Fed made two big mistakes that helped to turn the recession of 1929 into the depression of the 1930s, and one of those mistakes was standing by and allowing bank after bank to fail.

The world wide panic that followed Lehman Brothers failure in September “proved that you cannot let a large internationally active firm fail in the middle of a financial crisis.”

While he doesn’t think the financial system is back to normal, Bernanke says it’s recovering, that the recession will end sometime this year and a recovery will begin in 2010.

President Obama has responded by promising that his administration will be a hands-off investor and sell its 60% stake in the automaker as quickly as possible.

But what exactly are we worried about?

Obama and his team of auto industry advisors led by financier Ron Bloom can’t be more incompetent than all those GM executives who wrecked the company — and remain in charge.

Indeed, that seems to be the weak link in the president’s entire plan.

Obama is using the automaker’s bankruptcy to make all the changes GM’s management resisted for years — focus on fewer brands, prune the overgrown dealer network, lower the company’s debt and deal with its uncompetitive labor costs.

Sure, Chairman and CEO Rick Wagoner and Vice Chairman Bob Lutz are gone. But I haven’t heard any plan to get rid of all the other top managers who are just as responsible for GM’s lousy cars and trucks.

Why should we have any confidence in their ability to create the new models it needs to stop losing market share, regain consumer confidence and truly compete with the likes of Toyota and Honda. Or even Hyundai.

Turning a spiffy new GM over to these guys is like turning the keys to a Corvette over to a teenager. It’s going to be wrapped around a tree in no time.

Until new leadership is found, I wouldn’t invest a dime in the new GM no matter how badly the president wants to get the government out of the car business.