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NEW YORK June 13, 2006 - According to David A. Wyss, Managing Director and Chief Economist of Standard & Poor's, it's about "as good as it gets" where the economy is concerned. "And that," he notes, "may not be a good harbinger."

Speaking before an audience of hospitality and real estate executives at New York University's 28th Annual International Hospitality Industry Investment Conference hosted by the NYU Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management, Wyss noted that the economy faces several formidable obstacles down the road.

High debt levels and sky high housing prices, especially on the coasts, were singled out by Wyss who said "we don't care how much we owe, we just care how much we have to pay back each month." He added that a declining savings rate where consumers now spend more than they make is troubling.

Wyss used the term "democracy of debt" referring to the fact that in the United States "we all owe money. The rich have mortgages and the poor have credit cards."

One area that Wyss expects to act as a positive force on the economy is lower oil prices. "I expect oil prices to come down," he said but added "I've been consistently saying that for the last three years. The fact that energy is so high and the consumer is still spending is a surprise to us."

He also predicted that the Fed, when it meets later in the month, will decide not to raise interest rates again.

Wyss also commented on the recurrent theme in much of the financial press these days, the so called "housing bubble". He believes that housing prices, especially on the coasts, have risen way above what could be justified by rising wage earnings. Wyss pointed to the fact that areas such as San Diego, which sports a 9.7 multiple of housing prices to income, are at a significant risk of price declines. New York is another area where he sees significant vulnerability. "The question is, when interest rates go up can people afford to pay that much of a multiple for their home," he said.