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ROBERT SIEGEL, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel. 2011 was a year of crisis and revolution and took a big toll on the world's financial markets. In the U.S., stock prices lurched along for much of the year, losing and gaining ground over and over again.

It was the year that saw the first downgrade of U.S. debt by a major ratings company, but investors kept pouring money into U.S. treasuries and interest rates fell to historic lows.

NPR's Jim Zarroli has this look back at a tumultuous year.

JIM ZARROLI, BYLINE: Stock prices are ending the year just about where they began and anyone who invested in anything but the bluest of blue chip stocks probably didn't make much money. And yet the flat trend lines mask a huge amount of volatility, says Jack Ablin, chief investment officer at Harris Private Bank.

JACK ABLIN: In many respects, this last year is sort of microcosm of the last decade in that we've gone up and down and ended up sideways and, you know, a lot of emotion, a big rollercoaster, but end to end, we're not going very far.

ZARROLI: Like 2008, this was a year when the stock market had more than its share of stomach turning days when the Dow Jones industrial average rose or fell by triple digits.

And this year, what sent the market into a tailspin often took place overseas. In March, Japan was struck by a deadly earthquake and tsunami that slowed the country's industrial base to a crawl. And because a lot of parts for cars and cameras and television sets are manufactured in Japan, the impact was felt around the world. That included the United States, where auto sales dropped off.

Meanwhile, the debt crisis that has plagued Europe for two years intensified. In Egypt, Tunisia, Yemen and Libya, protesters succeeded in driving longtime autocrats out of power, but the chaos and uncertainty drove oil prices up. In August, Standard and Poor's downgraded U.S. debt for the first time after a crippling fight over whether Congress should raise the debt ceiling.

But the debt markets seemed to shrug off the downgrade and the interest on U.S. debt kept falling. Investors didn't seem all that worried about the U.S. fiscal picture, says David Kelly, chief market strategist for J.P. Morgan funds.

DAVID KELLY: It's not like Standard and Poor's told investors anything they didn't already know, so when Standard and Poor's downgraded the United States, that really didn't change people's perception of the credit-worthiness of the U.S. government, and of course, then the Federal Reserve stepped in to say, we're going to support low interest rates in a variety of other ways.

ZARROLI: With all of the threats hanging over the economy right now, U.S. Treasury debt still seems like a safe haven. And as Europe heads toward what looks like a recession, the clouds are parting a bit in the United States. Again, Jack Ablin.

ABLIN: There's starting to be somewhat of a disconnect. We're getting good, solid economic numbers here at home. They're still having their issues. They're still having their meetings and they're still having their debates.

ZARROLI: But Ablin says, as the new year approaches, there are still big threats out there that keep him up at night. One is China, which has benefited from an enormous infrastructure boom.

ABLIN: They need roads, they need bridges, they need trains, they need airports. But I'm not sure they need all of the construction that's been going on and they're obviously building towers that are empty. Eventually, that's going to catch up with them.

ZARROLI: And a big slowdown in China would be felt in all of the countries that sell its products and commodities, including the United States. The U.S. has become more closely tied to the world economy than ever, and as the events of this year have underscored all too well, what happens overseas can have a big impact on money that's invested at home.

Jim Zarroli, NPR News, New York.

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