Warren Buffett has been in the news quite a lot these days.

Flush with cash, Buffett is approached when the going gets tough. With the credit markets in a bit of a bind, Buffett is finding plenty of opportunity these days.

Perhaps the next big deal for Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) will involve Buffett's offer to assume liability for more than $800 billion in municipal bonds from the major bond insurers such as MBIA (NYSE: MBI), who have yet to accept.

Buffett has also been doing what he does best: plunking some serious bucks in good old-fashioned stocks. Students of investing and Fools in general would do well to copy the master and invest in simple, solid businesses.

Say cheese
Berkshire's recent quarterly filing revealed that it has amassed a nearly 9% stake in Kraft Foods (NYSE: KFT). Kraft is a clear example of the type of business that Berkshire loves to own.

First and foremost, it's a simple business: the sale and manufacture of food and beverages. Kraft makes products that are staples in many American households, among them Nabisco cookies, Oscar Meyer

In mid-2002, most high-yield bond funds offered yields in the 8%-10% range and most diversified investment-grade bond funds offered yields in the 4%-6% range. In an article posted on Morningstar.com in May of that year, I wrote how the high-yield market looked friendlier than it had in quite some time. Yields are now back in those same ranges, but I don't have the same positive feeling about the junk-bond market.

In 2002, the default rate was dropping and the economy was improving. We have just the opposite shaping up for 2008. The default rate remains historically low, but Moody's predicts that it will jump from 1.1% to 4.6% by the end of the year. Others predict slightly higher or lower default rates, but the overwhelming consensus is that defaults will increase, as the economy fights to stave off inflation and companies look to refinance debt in a tight credit environment. The economy grew in the fourth quarter of 2007 but at an anemic pace. And while the Federal Reserve has cut interest rates in an effort to spur growth, it will take time for those cuts to have an impact on consumer spending and the economy. Meanwhile, the housing market remains a big concern, as falling home values and rising adjustable-rate mortgage payments have sent many homeowners into foreclosure.

It's no wonder that the spread or difference between junk-bond yields and Treasury yields has soared over the past year--investors are simply demanding more yield in return for more risk. But are they

NEW YORK (AP) -- Oil futures rallied again Wednesday, pushing briefly past $101 a barrel after the Federal Reserve lowered its forecast for economic growth this year, convincing energy investors that the central bank will slash interest rates further. At the pump, meanwhile, gas prices rose another 2 cents overnight.

The Fed said damage from the housing slump and problems in the credit markets will slow economic growth to between 1.3 percent and 2 percent this year, down from a previous forecast for GDP growth of between 1.8 percent and 2.5 percent.

Oil investors can interpret such news in one of two ways: Selling on concerns that the economy, and thus demand for oil, is cooling; or buying on the prospect that interest rates will fall, weakening the dollar and feeding new buying of oil futures. On Wednesday, they definitively chose the latter view.

"The Fed was ... the catalyst to get us going here," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

The contract for March delivery of light sweet crude, which was expiring later Wednesday, rose 73 cents to settle at a record $100.74 on the New York Mercantile Exchange after earlier rising as high as $101.32