welcome back to cnn's continuing coverage of the death of north korean leader kim jong-il. north korean media say kim passed away on saturday but it's only been in the past few hours that they have been reporting his death. he was 69 years old. as reported to have died of a heart attack. kim led the democratic people's republic of korea for 17 years. he stepped into power following the death of his father, kim

il-sung who founded the reclusive state in 1948. his funeral will be held on december 28th, a day before a period of official mourning comes to an end. and this is how the news of his death was reported on television in north korea. plenty of emotion on display there. that's hardly surprising considering the cult of personality fostered by the deceased dictator and his followers. whatever you might think of kim jong-il, there was no denying he was an out of the ordinary head of state. let's take a look at the man and his life with dan rivers.

>> reporter: kim jong-il was a diminutive stature and characteristic hair were parroted by some of in the west. for the citizens of the democratic peoples republic of korea, kim was the embodiment of this reclusive state, feared, loved, worshipped, his cult of personality was deeply entrenched. his father was kim il-sung who founded north korea with soviet backing after world war ii. kim jong-il was just a little boy when the korean war broke out in 1950 with the soviet-backed north invading the american-backed south. after fighting ended, kim jong-il became steeped in his father's philosophy of self-reliance. and the north became evermore reclusive. the north and south remained technically at war, separated by a tense demilitarized zone. gradually, kim jong-il was groom for the top, making public

appearances in front of cheering crowds. when kim il-sung died in 1994, he was declared eternal president. his son instead became general secretary of the ruling workers party of korea. and by 1998 as head of the army he consolidated his position of absolute power. >> he will be remembered as a person who was responsible for awful things, for the existence of one of the worst dictatorships in probably not only korean history but in the war history, at least in the 20, 21st century. he did not create his dictatorship, it was his fathers but he took responsibility and made sure it continue for many more years. >> reporter: he was known for his love of fine wines with be at odds in a country where food shortages were common.

his people were literally starving to death. the collapse of the soviet union hit north korea hard, suddenly ending guaranteed trade deals. and then devastating floods compounded the famine. estimates vary for the number that died but even the regime itself admitted that almost 250,000 perished between 1995 and 1998. some say it was more like ten times that figure. but in the capital, pyongyang, the artifice was maintained. kim jong-il was well-known as a film buff, here visiting the set of a north korean production. his personal video library was said to include 20,000 titles with "rambo" and "friday 13th" topping the dearly disfavorite flicks.

in 2000 there appeared to be a thaw in north/south relations, the first ever summit meeting between kim jong-il and president kim dae-jung. the south's so-called policy of engagement seemed to be bearing fruit. but kim jong-il pressed ahead with his nuclear weapons program. the u.s. labelled it part of the axis of evil in 2002, a year later, north korea withdrew from the nuclear nonproliferation treaty. in 2006, the north conducted a nuclear test and test fired missiles. it added extra urgency to the six-party talks designed to deal with north korea's nuclear program. a breakthrough came in 2007 when kim jong-il finally agreed to disable the nuclear reactor, in return for fuel and better relations with the u.s. despite dramatically blowing up the cooling tower, north korea seemed to backtrack afterwards, the deal appeared to be in

jeopardy. the capture of two u.s. journalists, laura ling and euna lee on the north korean border sparked another crisis in 2009. it ended when former president bill clinton flew in and successfully negotiated their release, prompting hopes there would be further engagement. observers say kim jong-il will be remembered as a nearly impossible man to bargain with, stubborn and fickle in equal measure, a man who kept 23 million people in a totalitarian nightmare in one of the most repressive, reclusive regimes in the world. dan rivers, cnn. let's take a closer look at the circumstances around kim's death. state media say kim died 8:30 a.m. on saturday. but they did not report his death to the world for another 48 hours. kim suffered a heart attack due to the, quote, great mental and physical strain caused by his

uninterrupted field guidance tour for the building of a thriving nation. it's also worth noting that state media reported that kim died on a train. he famously refused to fly and often traveled by train. kim jong-il has near god-like status in north korea. look and listen to the reaction to his death on the streets of the capital, pyongyang. [ sobbing ] >> north koreans are openly weeping, overwhelmed with emotion. and this is incredibly rare video out of north korea. the outside world hardly ever gets a glimpse inside the reclusive nation. and it is another sign of what a momentous event kim jong-il's death is. china is, of course, north

korea's closest ally and beijing is playing respects to kim jong-il. earlier today, the flag was lowered to half-staff. a crowd of people gathered to watch the symbolic move in honor of kim. and the chinese news agency says beijing expresses deep condolences over passing of kim. other international reaction has been pouring in as well. a u.s. official says north korea faces extraordinary change and uncertainty and that an insecure north korea could be even more dangerous. now, earlier, the white house press secretary issued a statement saying this, quote, we are closely monitoring reports that kim jong-il is dead. the president has been notified. and we're in close touch with our allies in south korea and japan. we remain committed to stability on the korean peninsula and to the freedom and security of our allies. meanwhile, south korea's defense ministry raised its national alert to the second of three levels and the president asks

that the people of south korea, quote, concentrate on economic activities and remain calm. and nearby, japan called an emergency national security meeting upon learning of kim's death. a staple has been issued offering condolences and japan's chief government spokesman says, quote, we wish the sudden news would not affect north korea negatively. cnn's coverage of the death of kim jong-il continues after the break. test test test young bach hmong bach mung bach.

you're watching north koreans reacting to the news that their dear leader, kim jong-il, is dead. state media stay kim died on saturday of a heart attack but his death was not announced until just a few hours ago. some hope, some fear and a lot of uncertainty after the death of the north korean leader kim jong-il. his 17-year reign of total power over his people is now over.

and reaction to kim's death has been flowing in from around the world. south korea in particular is concerned about what might come next in north korea's leadership ranks. for more, let's cross to the south korean capital. we have a professor of political science at a university. he joins us on the line. professor, welcome to cnn. i understand you have met kim jong-il twice in person. now that he has passed away, can you tell us, what is your frank assessment of him? >> i think he's very rationale and a leader with a lot of knowledge. initially i thought he's a very irrational leader. after i met him twice, i came to the conclusion he's a quite rationale guy. >> it's incredible to hear that you describe him as a rationale person. >> yes. >> i want to ask about the cult of personality factor, a

portrait of kim jong-il hangs in almost every household in north korea. how is kim jong-il able to cultivate that same cult of personality that his father, kim il-sung had? >> i think he simply inherited the cult of personality from his father. i would say he might have been a victim of structural validity which his father created. in that system of intimidation and control and absolute dictatorship. >> does kim jong-il inherit the same cult of personality? >> i think so. >> tell us about kim jong-il's brother-in-law who is believed to be the one wielding the power behind the scenes, the one who is truly in power, not kim jong-il but his brother-in-law, is that right? >> i don't buy that argument. i met him several times. he's the kind of guy who never comes to the phone. he would work behind, even under the current sitting.

i really don think he will come forward. he'll be working behind the scenes. >> he is working behind the scenes to support the great successor? >> yes. >> how influential will he be? >> particularly his wife, sister of kim jong-il. both of them working for him. they know if there's any kind of power conflict it become the enof the north korean regime. >> have you met kim young un? >> no. >> how will the transfer of power fare with him, the great successor? >> i don't see immediate chaos or internal struggle in korea?

even though his succession has been rather short, i think he laid out a good system for him, first from the kim family, personality cult and personality to cult and second, korea's worker's party has been fully institutionalized, in a spot behind kim jung un. they have had to show unfailing loyalty. i wouldn't see any count of immediate change, power struggle in north korea. >> he has the backing of the political elite and of the military. you do not see a political transition that will not be smooth. tell us more about kim jung un. we know he's young, early 20s. will we see a north korea more modern?

>> he's better than any other leaders in terms of exposure to international society. but i wouldn't say he would have very much in a structurally constraint in his behavior, therefore, he should be balancing what he personally wanted to do and the word of the structural mandate of north korean society, particularly by the military. he'll be working. >> the funeral of kim jong-il will take place december 28th and it is expected that kim jung un will be there and take power quite publicly. can you give us a preview of what to expect? >> it will take some time. the mourning period will be over december 29th and in february there will be a 70th birthday of kim jong-il and there will be in april there will be 100 anniversary of kim il-sung's birthday in april.

after those periods pass through there might be some institutionalized in the way of anointing kim jung un as the real successor. he has the title of vice chair of koreas workers party. his father used to have a -- another type he's chairman of the national defense commission and third type, supreme commander of peoples army. therefore, kim jung un has to take the procedure steps to get all those in a post. the process could be somewhat -- rather than abrupt. >> thanks for giving us a fascinating glimpse inside the kim dynasty. moon chung in, who has met kim jong-il twice and described him

as rashal. we'll be right back with a look inside the north korean capital, don't go away. it's so easy. now this might even impress aunt martha. pillsbury crescent wrapped brie. holiday ideas made easy.

let's recap our top story. north korean leader kim jong-il is dead. state media reported his death at noon local time today, saying he died at 8:30 in the morning on saturday. a tearful anchor woman said kim die due to overwork after dedicating his life to the

people. north korea's state-run news agency reports kim suffered great mental and physical strain while on a train during a field guidance tour. now, it says kim suffered is a heart attack and couldn't be saved despite the use of every possible first aid measure. now, north korea has a very interesting relationship with its neighbors. it's situated on a peninsula. it's bordered on either side by china and south korea and relations with its northern neighbor described as warm and collaborative. to the south, tensions remain high, after several military squirmishes and nuclear missile tests along the border with south korea. north korea is notoriously reclusive nation and cnn's wolf blitzer travelled to pyongyang last year with former ambassador bill richardson and here is what he saw. >> reporter: the north korean capital is a lot different than i thought. take, for example, the subway system. it takes forever to get to the

underground station. i never saw such strong escalators, even longer than the washington, d.c. metro, so deep it could and does double as an underground bunker. we're here at the prosperity subway station, deep underground. you saw how long it takes to get through the escalators. we're really, really deep underground. patriotic pictures all over the place. as we're speaking right now, patriotic music going on. it's the nature of pyongyang and north korea. a lot of patriotism, a lot of propaganda music and propaganda pictures all the time. new mexico governor bill richardson's senior adviser is tony nam-kung. he's been to korea 40 times going back to 1990. we're still on the train. i have no idea where it goes. so far, so good. tony, what do you think about this subway?

>> it reminds me of an underground bomb shelter, it's so deep. >> reporter: that's what i thought. >> a colorful station with the paintings and the color. it's very crowded midday. a lot of people moving backwards. >> reporter: do people pay for this? >> yes. five per ride. >> reporter: how much is that per u.s.? >> it's about 100 won to the deliver. >> reporter: so it's a nickel. >> most people use six-month passes which they buy for about 100 won. >> reporter: just a dollar. >> very cheap. >> reporter: a dollar they can basically ride for six months? >> that's right. as much as they want. >> reporter: that's a pretty good deal. we're moving now, it's pretty smooth. but sometimes it goes dark. electricity shortages are a problem in north korea.

we went to this classroom, the rooms were not well lit, it was so cold you could see their breath. this is kim il-sung square. it's huge, magnificent. they often have events here which is totally understandable. these are all government buildings over here and this is a magnificent palace in front of me, if you want to flip over, you can see the foreign ministry and you see this marvelous structure over here. this is a brisk cold day on this friday. here in pyongyang. but it's nice. there's not a whole lot of traffic here. it's icy, streets are icy. it's snowy. you see a lot of people shoveling. there you see the hammer and sickle of this communist government. you see manifestations of the communist philosophy. then you see a lot of young people and some not so young

just shoveling snow, which is totally understandable given what's going on. but it's brisk, it's lovely. it's a nice day here in pyongyang. we drove all over the north korean capital, saw lots and lots of buildings, some looked impressive from afar but i couldn't help but wonder if they were just for show. were there really people living inside? i couldn't get access to find out. we also went to the national library where they have lots of less than state-of-the-art computers. they also have a music room with old school boom boxes and head sets. folks could listen to their favorites. i was surprised by some of them. ♪ and she believes in me >> who would have thought -- we're here in the library in north korea, pyongyang, and we're listening on this big box over here to kenny rogers. how are you? i had some fun when i saw the

north korean girls national ice hockey team jogging outside the national ice rink. we're running. we're running. everybody is looking good. i couldn't help but join them. with my handheld camera shooting away. wolf blitzer, cnn, pyongyang, north korea. cnn's coverage of death of kim jong-il continues after a break. with a look at who is next in line to lead north korea. don't go anywhere.

welcome back. let's recap our main story this hour, the death of kim jong-il. state media reported that kim's death at noon, some two days after he suffered a heart attack and passed away. the news has prompted an outpouring of grief in north korea which began with the announcement of his death on state tv. >> a tearful and dramatic moment there on korean -- north korea state tv. let's take a closer look at the mysterious young man who parentally will succeed kim jong-il, his third and youngest son, kim jong un. he's being caused the great

successor to the revolutionary cause. he went to school in switzerland and then atened itted a military university in north korea. to date, he's had no direct contact with world leaders. but in a hugely symbolic sign that his father was grooming him for power, kim jong un was made a four star general just last year. and still it's unclear if he has any real decisionmaking authority. we've been canvassing reaction across the region, including china where stan graham joins us now from beijing. how is beijing, korea's closest ally, reacting to the news of the death of kim jong-il. >> reporter: an official has been released. they are sending their condolences to north korea saying that the north korean people will call on this as an opportunity for unity, also praising kim jong-il as a great leader of socialism.

but also, this is most importantly urging stability in the region and pledging china's efforts to try to maintain that stability. this relationship between china and north korea has a very, very close one. in the past it's being described as lips and teeth. it dates back to the korean war when chinese volunteers as they were known, fought alongside north koreans against the united states, south korea and others. so this is a relationship that's steeped in history, that's forged on the battlefield. china has a big economic stake in the country. in fact, it is the greatest benefactor to north korea. north korea relies on china for the bulk of its trade and most importantly has willed most of its fuel supplies as well. what's going to be intriguing here is the relationship between the united states and china. now we know this is an emerging super power rivalry.

h this is going to now be the critical link in this chain. do they adopt cold war positions? does the united states side with south korea and china side with north korea or are they able to find a way through this and try to bring about stability, ensure there is a stable process within north korea, that there isn't an implosi implosion. more importantly, there's no misunderstanding that can so quickly escalate into conflict. >> i also wanted to get your thoughts on kim jong un, the four stall general, the great successor. we hear he has the backing of the political elite and the multi, yet, stan, he's 28 years old, 29? and he's in charge of a nuclear-armed country? stan, does he have the know-how to navigate politics and to lead? >> reporter: certainly very young. right there you've hit on something. we don't know how old he is. some say 27, 28, 29. he lived a life outside of the spotlight growing up.

there have been pictures of him apparently attending boarding school in switzerland. we understand he has interest in the west, likes basketball, likes hollywood films as his father does. in the last couple of years he's emerged as the successor. he's been brought to china by his father to meet with the chinese leadership to get their stamp of approval if you like. certainly there was a transition process in place. you touch on something really interesting there. that is last year. he was made a four star general. some see his fingerprints on the attack on the u.s. naval -- i'm sorry, the south korean naval ship last year and also the north korean -- of north pyongyang island. some an attempt by kim jong un to show his credentials, the hardliner north korea is used to in its leadership. the real question is his relationship with the military generals.

these are the old men with the medals standing beside kim jong-il. how is he going to establish his authority there and most crucially his relationship with his own uncle, the husband of kim jong-il's sister. he's also seen as a power broker behind the scenes. it's going to be critical going forward. >> i want to ask you about the relationship between china and north korea. it is very close, dates back six decades. why are these two countries such close allies? despite the smiles and hugs for the camera, is there suspicion and concern on both sides? this relationship is very close. china played a key role in getting north korea to the table for the six-party talks, china being instrumental in bringing those parties together. as they say it's a relationship that's been described as close as lips and teeth. it's not a relationship that hasn't had problems. at various times, china pulled

back on the level of aid to north korea. there are reports when north korea carried out its nuclear test, that took china by surprise and created some consternation here. korea is proud of its history. china hasn't been able to go in and push them around. interestingly, more spotlight fell on this relationship with the collapse of other communist regimes during the '80s and '90s, particularly the relationship between north korea and the soviet union, a key relationship for north korea's trade when it lost that, it had to rely even more on china and that is going to be the key to maintaining stability here, just what pressure china can bring to bear and how china can keep any accident, any miss understanding from occurring. kristi? >> stan graham, live in beijing. thank you very much.

mike chinoy reported extensively from the region. he told us how on a recent visit he was struck by the stability of the regime. >> reporter: been in pyongyang in six years. i went back in august. i was struck by the sense of political stability across the board, the diplomats, the aide workers, the people i spoke with seem very convinced that the succession was on track, that there was not a lot of internal discord about it. moreover, there was very intriguing signs in pyongyang of sort of inklings of movement towards opening up a little bit. north korea now has over 500,000 people using cell phones with an internal cell phone system that was set up by an egyptian company. there are more private restaurants than i had seen before. there was even the first joint venture pizza parlor in pyongyang. they were moving ahead with economic zones with the chinese.

while i was there, kim jong-il went to russia and talked to vladimir putin about north korea and russia and south korea jointly setting up a gas pipeline to send natural gas from the russian far east through north korea to south korea. and at the same time, north korea's first vice foreign minister was in washington eating with the united states. so i came away not with the sense that the north koreans were embracing chinese-style market reforms but that the focus was on securing a more tranquil external atmosphere and trying to crank up the economy and that fits into the critical importance of the year 2012 in the north korean calendar. north koreans call is ju chai 100. it was invented by kim il-sung. april 2012 is his 100th birthday. the mantra has been the country should be a powerful and prosperous country. the powerful they got because

they are nukes. the emphasis was on the prosperous. you had indications of focusing on the economy. i actually came away with a sense that it was a little bit more relax and a little bit more open to being open than it had been before. it's very hard to interpret what that means and it may well be in this period of, you know, national tragedy and crisis that the north koreans will tighten things up again, which is a natural response. but there were interesting vibes that were significantly different from the the conventional picture of north korea that a lot of people have. >> north korea watcher mike chinoy there. cnn's coverage of the death of kim jong-il continues with a look at the legacy he leaves behind. stay with us. imagine... one scooter or power chair that could improve your mobility and your life.

one medicare benefit that, with private insurance, may entitle you to pay little to nothing to own it. one company that can make it all happen ... your power chair will be paid in full. the scooter store. hi i'm doug harrison. we're experts at getting you the power chair or scooter you need. i didn't pay a penny out of pocket for my power chair. with help from the scooter store, medicare and my insurance covered it all. call the scooter store for free information today.

welcome to our continuing coverage of the death of north korean leader kim jong-il.

a tearful broadcaster reported that kim died due to overwork after dedicating his life to the people. north korea's state-run news agency that the 69-year-old died as a result of great mental and physical strain while on a train trip on saturday. there were more tears on the streets of pyongyang earlier today. the funeral is planned for december 28th. on the korean peninsula, it's long been a hot bed of tension and conflict. the korean war, it was sparked in 1950 when the north attacked the south. u.n. troops helped defend the south while chinese forces backed the south. almost 3 million people lost their lives. the two nations remain technically at war. they've agreed to a truce but not a treaty the dmz, the demilitarized zone around border remains one of the most heavily guarded in the world. south korea, much of the

regionen is concerned about what might come next in north korea's leadership. we asked hon sung ju about that. >> i was the foreign minister when his father, kim il-sung died in 1994. and we had then and i'm sure right now, we had plans to military ready for unforeseen provocations or events and also we had to see what's going on. the very important part of the preparation would be to have very close consultation with other countries, particularly allies, the united states, japan, china, russia and so on.

>> and so what do you think is happening inside pyongyang right now? >> well, pyongyang took two days to announce the deaths of kim jong-il and also announced make-up of what they call the funeral committee, which consists of 232 members headed by kim jong un, the third son. they are trying to put up a face that is both orderly and united. we are not sure whether the death was natural or if there was any foul play, but regardless, they are trying to put up best face under the circumstances. >> now, one of kim jong-il's lasting legacies will be the country's nuclear development. in 1994, the year he came to

power, north korea agreed to freeze and dismantle its nuclear weapons program. and four years later, the u.s. and north korea held the first round of high-level talks about pyongyang's suspected construction of an underground nuclear facility. negotiations with north korea became a back and forth of broken promises with pyongyang pledging to stop its weapons program in exchange for aid, only to renege. north korea withdraw from the nonproliferation treaty and that april they declared they had weapons. three years later, north korea claimed it successfully tested a nuclear weapon. in 2007, pyongyang agreed to disable its income weapons facilities and the next year, north korea destroyed a water cooling tower, a facility where it constructed plutonium for weapons. in 2009, north korea conducted its second nuclear test.

how is the u.s. state department dealing with the news? this earlier from washington. >> i think it happened a little bit sooner than they thought it would. and they really don't know who is running the show, as we've been saying. it kim jong un making decisions at this point or are these so-called regions, his aunt, uncle, the sister of kim jong-il and her husband, are they the ones making decisions? is the military making decisions? i think there will be a real period of uncertainty for the united states. they had seen some progress in engagement with the north over the last six months or so. i think they're going to put on the brakes a little bit, try and decide what they're going to do. they'll have to calibrate the messages over the next 24 to 48 hours. are they going to offer condolences? are they going to anoint, so to speak, the so-called new leader

that we expect him to be. it hasn't been announced obviously yet. i think the u.s. is going to really tread very carefully. there's not going to be a wholesale engagement. overnight, the u.s. isn't going to embrace this young, untested leader but i don't think they want to close the door to what we've been talking about all evening, that this could be an opportunity. could he be a more benevolent leader than his father? it's certainly possible but he could also be a more unpredictable leader. and he's untested. the north koreans will want to portray him as in command. could that mean an overture toward the west or some provocative waiver towards the south? i think they'll be watching and waiting to see as they closely, closely coordinate with south korea. >> our in-depth coverage of the death of kim jong-il continues after the break.

and i'm gonna need to see a receipt for that watch you're wearing. you know, you really should provide us with a checklist of documents we're gonna need up front. who do you think i am? quicken loans? at quicken loans, we provide a checklist of the mortgage documents you'll need up front. it helps keep you in the know every step of the way. one more way quicken loans is engineered to amaze.

kim jong-il may be gone but his legacy is still very much present in north korea and perhaps the most obvious part of that legacy is an economy that is in tatters. north korea, it is one of the world's poorest countries. its people get by on an average of less than 5 u.s. dollars a day. that's about $1,800 a year. south koreans by contrast take home an average of $30,000 a year.

16 times what their northern counterparts do. in recent years, north korea may have avoided the famines that killed millions in the 1990s but many of its people are malnourished and food is in short supply. the central bank of south korea says gdp in the north contracted for five consecutive years up to 2010, the latest year for which data is available. and the economic picture is unlikely to have gotten any brighter since then. south korea cut off most aid, trade and cooperation with pyongyang after the sinking of a south korean war ship and north korean shelling of southern territory late last year. the contrast between north and south could hardly be more extreme. figures from the central bank in seoul showed the north trade was worth 2% of the south's in 2010. take a look at how the markets reacted to today's big news. to do that we're join by "world

business today's" pauline chiou. take a look. the ftse is up by more than 0.3%, the xetra dax up by 0.75 and the zurich smi up by 0.5%. there may be optimism later on today that there may be a resolution, some sort of progress. take a look at the asian markets. the seoul kospi was down almost 5% at one point. it end down 3.4%. the nikkei also in negative territory and so was the shanghai composite and the hang seng. i want to bring in kim do to talk more about what happened with the kospi. thank you very much, kim, for being with us. let's take a look at the seoul kospi today during the trading session. when we see this dip, that's when the news really started to trickle out about the death of kim jong-il. everyone knew that he was ill and this day would come.

what do you make of the market reaction here today? >> i think that the market -- i mean the market fell by about 2% before the news came out. if you look at australia and other asian markets they fell by 1.5% to 2%. this axillary to the downtrend somewhat. as you said, we did have a slight recovery. i think there's uncertainty about the succession play. we know kim jong un will be promoted to be the leader in the nation. that's still some suspicion, perhaps there could be contentious issues with him being the leader. >> there could be a power vacuum? >> that is correct. >> it could be the brother-in-law or maybe some of the older generals who have been in place for a while? >> yes. >> as a result of what happened today, there was also a lot of movement in the currency markets, especially with the korean wan. there was a big sell-off today. we're tracking at currency traders looking stressed out

today in seoul, as you can see. let's take a look at what happened with the wan against the dollar here. there was a sell-off at the same time, around noontime local time when the news came out. we saw a big sell-off towards that time, if we can look at the graph. i don't know if we have that. there's been an unwineding ofationen currencies recently. were you surprised by the sell-off? >> i think maybe it's the extent of it. asian currencies have been weakening over the u.s. dollar over the past few weeks anyway. the carry trades are being unwound as you mention, with the risk aversion, with investors deciding to reduce risk, they tend to sell out of asian currency, sell out of asian equities and return the money back to the u.s. so that's why the u.s. dollar has been rising against theationen currencies and stock markets. two days' move obviously has been accelerated by the news, yes.

>> we see the big sell-off where the wan hit 11.79 against the dollar. with the news and what might happen with the succession plan, that begs the question of what's going to happen to the neighbor, south korea and south korea's economy and its credit rating. and fitch and s&p both said the news of kim jong-il's death will not affect the credit rating of south korea. but if the risks increase, it could change sort of the game plan there. as an investor, what will you be looking for? >> definitely we don't think that the news today is going to impact on the credit rating change at all. but i think that we have to keep an open mind about this change in succession, because kim jong un is unknown to most of us. and we don't know what his policies are, really. and as a result of that, it could be very positive or it could be very negative.

i think that we have to keep an open mind about it. that's why i think that in the general risk averse environment investors tend to reduce their positions in korea today. but as we have seen in 2006, 2009 and last year, usually after these either the nuclear test incident or the attack on the south korean -- >> the ship there. >> the ship or let's say some shelling, usually the markets tend to recover. >> all right, khiem do, thank you very much for your analysis today. it was a big news day today. interestingly enough, the european markets are not really reacting to this news in asia. we'll certainly keep our eye on the markets there as well. >> thank you. still ahead, we take you inside pyongyang, that in the next hour of our rolling coverage of the death of kim jong-il. you're watching cnn, the world's news leader.

it's so easy. now this might even impress aunt martha. pillsbury crescent wrapped brie. holiday ideas made easy.