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The New Alchemy At Sears

It has quietly created $1.8 billion in securities based on Kenmore, Craftsman, and DieHard

Sears Holdings Corp. (SHLD ) Chairman Edward S. Lampert talks lovingly of his plans to reinvent Sears and Kmart Corp. (SHLD ) He makes great theater out of his surprise visits to stores to check out the displays of power tools and the length of the checkout lines. The stock analysts who cover the Hoffman Estates (Ill.) giant follow his lead in counting foot traffic and poring over profit margin data.

But much of the real action at Sears is taking place far from the retail front lines, on a theoretical plane where few have traveled before. Sears is on the cutting edge of a financial innovation so important that it could unlock trillions of dollars in capital across Corporate America and change the way managers of a wide range of businesses think about their balance sheets.