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Sears Is Still Headed for a Fiery Ugly Death, Despite $200 Million Gift From Its Best Friend

Sears Holdings Corp. (SHLD) will still go up in flames.

So the bulls trading this dog of a company long may want to relax a bit. Shares of the dying department store surged 14% on Tuesday as Eddie Lampert loaned his biggest investment another $200 million. Lampert has now loaned Sears about $1.6 billion in a bid to keep the company afloat. The interest rate on Lampert's gift: an alarming 9.75%.

Why Sears is in big trouble extends beyond terrible-looking stores that needed massive investments like 10 years ago. Nope, there is an ugly storm brewing that could topple Sears within the next two years. Key considerations:

1. Lampert is sucking Sears dry with these high interest rate loans. The loans will have to be paid back a lot quicker than anyone realizes -- just check the filings.

2. Sears continues to send negative signals on its business to suppliers by accepting such high interest rate loans. Desperation moves that are likely to hurt in-stock levels this holiday season

3. The company is internally broken. There is no path to cash generation.

Get the notepad out folks, because the downfall of this once proud company is going to be quite the spectacle.

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