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Following the recent decline in Libor rates, the yield (10%) on Warren Buffett’s preferred stock investment in General Electric (GE) and Goldman Sachs (GS) is now appearing to be entirely in line with the evolving reality of corporate debt: that effective interest rates should incorporate perceptions of default risk. But bond traders in the US marketplace are obviously unwilling to accept that credit default swap spreads should be playing an integral role in determining yields for longer-dated General Electric and Goldman Sachs maturities.

It's been a tough five years for FirstEnergy (FE), the nation's fifth-largest publicly owned utility. First the company had some bad publicity for its role in America's biggest blackout. Efforts to overcome that blunder and improve operations have left investors seemingly unimpressed, and there are still concerns about the effects of rising fuel costs, stricter pollution laws, and reduced electricity demand. With a $73.63 close on Friday, well below its 52-week high of 84, Barron's sees potential for this stock to shine.