Dear Value Seeker,

Christmas is almost upon us.

Business activity is winding down. In some cases, it’s stopping altogether.

According to the Financial Times, some of the biggest tech names in Silicon Valley will be shutting up shop over the holidays to cut costs.

Meanwhile, the bosses at Toyota have signaled that the automaker could post its first yearly operating loss.

Contrarian blogger Mish Shedlock warns that corporate losses may be the least of our worries. That’s because a new, highly-contagious fiscal virus is taking hold of the world economy.

“The primary symptom of FIV [Fiscal Insanity Virus] is irrational, often delusional fear of deflation. The virus has an uncanny ability to seek victims in positions of authority. Those afflicted with the virus start taking (or promoting) fiscally reckless actions guaranteed to damage the host country.”

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President-elect Barack Obama looks like he’s been exposed.

He has raised the stakes of his forthcoming stimulus plan. Now he expects to spend around $800 billion to save three million American jobs.

And the IMF’s Dominique Strauss-Kahn is clearly infected.

“I’m especially concerned by the fact that our forecast, already very dark…will be even darker if not enough fiscal stimulus is implemented,” he told the BBC this weekend.

Spend now and worry about the consequences later. That is what we were encouraged to do during the credit boom. It ruined the private sector. Now the government is going to have a go.

Think they’ll fare any better…?

It’s not just fiscal stimulus on the menu either. Our beloved leaders are conjuring up more ways to ‘fix’ the bust.

The Washington Post reports that many countries are already backtracking on promises to stick to free trade principles.

Russia, France, Brazil, Argentina, India and Indonesia are putting up new trade barriers designed to protect domestic industries.

The US doesn’t escape this list.

Last week’s decision by the White House to throw $14.3 billion at the terminally ill “Big Three” automakers will grossly distort the free market… Not to mention flushing a nice big wad of taxpayers’ money down the drain.

On to today’s picks…

Taipan Daily editor Justice Litle says two things are clear right now: 1) America’s infrastructure is in desperate need to repair and 2) Washington is ready to spend trillions to ‘rescue’ the economy.

Put them together, and this means big business for construction companies in the coming years.

Justice picks eight of the best companies in the industry.

Lynn Carpenter at Investor’s Daily Edge says investors could double their money within the year with Starbucks (NYSE:SBUX).

SBUX lost over half its stock value in 2008. But founder Howard Schultz is back in charge to oversee major cost-cutting in the US and an ambitious expansion in overseas markets.

Lynn says today’s price offers investors a second chance to profit in this massive growth story.

Money Morning’s Mike Caggeso says Yum! Brands (NYSE:YUM) is one of the most promising investment picks for 2009.

The fast food group is busy expanding its established brands into emerging markets.

The company has big hopes for its operation in China. This is the core of its double-digit growth strategy for next year.

Finally, Jim Nelson at Penny Sleuth says so-called “spin-off” stocks are a proven way of making solid gains.

When a company decides to divest a subsidiary, the new business regularly outperforms the parent organisation and the broader market in the immediate aftermath.

This means well-informed investors can make quick and easy gains with the right spin-off stock.

Happy Hunting,

Will Bonner

Publisher,

Hidden Value

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