Now that the year 2020 has closed, we can try to assess the damage that COVID-19 brought to the economy.  No surprise to find that 2020 business bankruptcies reached an 11 year high.  However, the damage is still being inflicted, so the likelihood is that 2021 may be another record-setting year for restructurings and bankruptcies.

Compiled by Bloomberg, the chart accessible through the link below shows that 244 companies with more than $50 million in liabilities filed bankruptcies during calendar year 2020.  That is the highest annual number since 2009.  The rate of bankruptcies slowed during the fourth quarter as expectations about stimulus and vaccines grew.  But the business fundamentals have not changed significantly.  Once the optimism fades - or is overtaken by the logistical realities of inoculating hundred of millions of people - we will have to address the permanent damage that has been inflicted on large sectors of the economy.  That reckoning will come this year, once the effects of the stimulus package have dissipated and the economy tries to claw its way out of the abyss into which it plunged last year.