Debt-for-equity waps: Drink lots of water

The credit bubble binge has ended. Now cue the equity purge. Companies ranging from carmakers to financial institutions went on a debt spree, leaving their capital structures ridiculously out of whack for a slowdown. Slumping demand and frozen debt markets mean these companies are saddled with huge interest payments and bonds that cannot be refinanced. This coda to the credit bubble’s end will feel miserable all around, particularly for shareholders. Sirius XM Radio’s example broadcasts the t...