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North Korean Leader Kim Jong-il Dies; Kim Jong-il's Youngest Son Kim Jong-un to Take Over Leadership of North Korea; North Korea Fires Short-Range Missile into East Sea; Boehner Rejects Senate's Payroll Tax Plan; Romney's Big Endorsement; Winter Storm; Last U.S. Troops Leave Iraq; Clinton: End Egyptian Violence; PSU Denies Sandusky Police Record Request; Tropical Storm Kills 650+ In Philippines; North Korea Unveils The "Great Successor"; North Korean Leader Kim Jong-il Dies; Financial Planners Give Advice on Holiday Shopping

Aired December 19, 2011 - 06:59   ET


ALI VELSHI, CNN ANCHOR: Good morning. It is Tuesday -- I'm sorry, Monday, December 19th. There's been so much news this morning I've already skipped to Tuesday -- Monday, December 19th. I'm Ali Velshi along with Alina Cho on this AMERICAN MORNING.

ALINA CHO, CNN ANCHOR: We've been watching big breaking news this morning.

Some hope, some fear, and lots of uncertainty. People reacting to the death of North Korean leader, Kim Jong-il. His 17-year reign of totalitarian power is now over.

VELSHI: Now, it was announced late last night on North Korean state television by a weeping TV anchor who could barely keep it together. Take a look.




VELSHI: This is the last known image of Kim Jong-il released by state media. North Korea says Kim Jong-il died Saturday of a heart attack he suffered while he was on a train. He was 69-years-old. Some people think it's surprised. He did not seem to be in terribly poor health.

CHO: There's little more known about Kim Jong-il than his son, Kim Jong-un, who is what North Korea calls the "great successor" to the so-called dear leader. He is said to be either 27 or 28 years old. A lot of questions already about whether he is fit to lead. And this morning a possible show of strength. South Korean media is reporting that the north has fired a short-range missile into the East Sea.

Instability in the region, of course, a major worry. Our Stan Grant is watching it all live in Beijing with reaction there. Stan, good morning to you. STAN GRANT, CNN INTERNATIONAL CORRESPONDENT: Good morning, Alina. China, of course, very close relationship with North Korea. This is a relationship that's being described as close as lips and teeth. It goes back to the Korean War when Chinese fighters fought alongside North Korean forces. Many say that China exerts the most influence over North Korea than any other country on earth.

That said. it has not always been smooth sailing in his relationship. We know that the North Korean nuclear tests in 2006 and 2009 put strains on the ties between China and North Korea, some analysts saying the North Korean tests spit in the eye of China.

China, who always blocked any U.N. resolutions to impose sanctions against North Korea, actually agreed to U.N. resolutions to impose those sanctions after those nuclear tests. That said, China has been able to bring North Korea to the negotiating table for the six-party talks. It provides the bulk of fuel, food, and trade to North Korea. And it is absolutely crucial in this moment of uncertainty that China works to create more stability in that region, and that's is what a statement said today. It expressed grief. It sent its condolences, described Kim Jong-il as a great leader of socialism, but saying it's important to work towards stability.

CHO: China said to be North Korea's best friend. Stan Grant live in Beijing with that side of the story. Stan, thank you.

VELSHI: Here, the White House says the U.S. is staying in, quote, "constant touch" with its allies in the region. CNN's Dan Lothian is live at the White House. Dan what can best be described as a quiet reaction from the White House so far?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. We've been seeing a measured response not only from the White House, also other nations that are part of the six-party talks. According to the White House, the president overnight at midnight, in fact, did speak with South Korean President Lee about this situation there in the Korean peninsula. They said that they would continue to stay in touch and would coordinate with their national security teams.

This followed a short response we got from the White House last night not long after news started to break of the death of Kim Jong- il. The White House, as you pointed outside, saying they're closely monitoring the situation there, but what was key was the stability on the Korean peninsula and the freedom and security of our allies.

We don't know yet if we'll hear further from President Obama on this later today, but certainly the North Korean situation is getting the attention of this administration.

VELSHI: All right, what is the White House likely view this death of being? Is it an opportunity to go further with these six- party talks, with negotiations with North Korea? Are they more concerned, do you think, Dan, about the unknown of his son?

LOTHIAN: You know, that is such a good question. A lot of experts have been talking about that this morning. I think it's really a balance between the two. There is certainly concern about whether or not this will just mean more of the same of what we've seen in North Korea. Could it set back some of the early baby steps that have been taken between this administration and North Korea in terms of establishing a relationship, as you know. There had been talks about establishing food aid, but also pressure on North Korea to ratchet back its nuclear ambition.

So right now I think it's pretty much an unknown as to whether or not we will see this administration, see this as an opportunity for change in North Korea or really a continuation of what has been happening there for so many years.

VELSHI: Which are better or worsening of relations. So we'll keep in touch closely. Dan Lothian at the White House this morning.

CHO: South Korea has ordered its military on alert while urging people to stay calm. Close to 30,000 U.S. troops are still stationed in South Korea and they are reportedly stepping up surveillance across the border this morning. CNN's Chris Lawrence live at the Pentagon with that side of the story. Chris, good morning to you.

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Good morning, Alina. Yes, another, also, a measured response flowing from, as Dan Mentioned, the official response from the White House. U.S. military officials in close contact with their south Korean military counterparts.

But as of right now, I don't know of any change to any sort of heightened state of alert. You remember back when North Korea was accused of sinking that South Korean ship and tensions were building in that region. The U.S. military was very reserved. They held off on calling that an act of war, had a very measured response in order to avoid inflaming tensions there.

But obviously, they will be keeping a very close eye on this. Last year former Defense Secretary Robert Gates said that he believed that some of the provocations by North Korea were due to the fact that the youngest son was trying to earn his stripes, so to speak, with the North Korean military, so that now that his father has passed on it will be interesting to keep a look to see if those provocations do continue.

CHO: The latest news, Chris, you well know, coming out of the region, is that North Korea has test fired a short-range missile into the East Sea. Our Tim Schwartz producer in Hong Kong is saying let's not rush to judgment and say this is directly related to the death of Kim Jong-il. Having said that, is there any early reaction from the Pentagon to this news?

LAWRENCE: Not yet. They're still assessing the situation. But as Tim mentioned, the short-range tests do happen from time to time. There's not anything overtly unusual about that. The thing that the U.S. really keeps an eye on is more of the long-range missile tests, the one that they conducted in 2006 that crashed with a minute, the one they conducted in 2009, which was ostensibly a missile capable of reaching the United States. It crashed between the second and third stages when they didn't separate.

But, yes. I talked with an official when I was doing a story on North Korea about six, eight months back, and he said, look, the worry with North Korea is not that they're developing these long-range missiles that have a first-strike capability. He said this isn't a case like with the old Soviet Union. The problem with North Korea is he felt they will sell to anyone and proliferation is the real worry with their military buildup.

CHO: CNN's the Chris Lawrence live at the Pentagon for us. Chris, thank you very much. We want to go straight to CNN's senior producer Tim Schwartz who joins us now live from Hong Kong. And you're getting more sort of intelligence on this news that North Korea has test fired a short-range missile into the east sea. Tim, what are you learning?

TIM SCHWARTZ, CNN SENIOR PRODUCER: Well, we're still getting very limited information. All we know basically is that the North Koreans did indeed test fire a short-range missile into the East Sea. Now, the south Korean government says they've been watching this for some time and they do not have any evidence to believe that this is connected in any way with the death of Kim Jong-il or is an overt act against south Korea. North Korea has weapons in its armament and must test them from time to time.

CHO: But it is not believed at this early stage, at least, that it's connected to the death of Kim Jong-il?

SCWARTZ: The South Koreans say they see no reason to believe that at the moment, with the information they have. I'd go along with what they say. The missile doesn't appear to be fired directly at South Korea and is not showing any new capability that they have. The missile is short range, not capable of the longer range missiles as Chris was talking about earlier. It's not an ICBM, it's not nuclear capable. And it's not an overt act against south Korea, as year ago when there was an artillery barrage aimed actually at south Korea, nothing like that at all. At the moment, we should remain cautious.

CHO: CNN's Tim Schwartz who has been to North Korea nearly 20 times, knows the region very well. Tim, thank you very much.

VELSHI: Let's bring in Victor Cha. He is the senior adviser in Korea, chair at the Center for Strategic and International Studies. Victor, thanks for being with us. I'm just reading something you published this morning in the "Financial Times" where you say "I could not think of less ideal conditions in a North Korea context under which the so-called "great successor" could be given the reins of power." The "great successor" is what the North Koreans are calling Kim Jong-il's son, who may be 27 or 28 years old. Victor, why are you so concerned about this?

VICTOR CHA, FORMER NSC ASIA AFFAIRS ADVISER: Well, Ali, I think largely because if you ask anybody inside or outside the government and the region what would be the most concerning conditions under which the North Korean regime would be existing, it would be if someone told you the sudden death of the current leader. And that's basically the situation we're now in. I mean, they have basically been trying to hand over power to the young son, who, as you said, is not yet barely 30 years old. He really hasn't established a group of followers. In the North Korea system you need a new ideology that accompanies a new leadership. They have not created the new ideology for him, at least publicly.

And this guy has really no experience compared to when his father took power in 1994. He had been groomed for about a decade and a half. So really less than ideal conditions under which they are trying to affect this power transfer.

VELSHI: What do we know about him? We speculate he's not 30 years. He's somewhere between 27 or 30. It's interesting there's a major world leader now and we don't even know that kind of detail. We knew of Kim Jong-il. As you said, he had been groomed for a long time. He was a military man. He was a marksman. He was a horseman. And he came in with an ideology. What do we know about this young man now taking his father's reins?

CHA: We know basically little to nothing about him. We know he's the youngest of Kim Jong-il's three sons. It's been widely reported that he spent some time being educated outside of North Korea, which makes some people hopeful he might be inclined towards reform in the North Korean system. We know that he was promoted to the rank of a four-star general last September as part of the big party conference in North Korea, even though he's never served a day in the military, which made some of the military upset. So we know all of these bits and pieces, but we can't put together a real profile of him, how he would want to run the country, who is a supporting him, and what his next steps are.

VELSHI: Is it likely that because he's been, you know, this is his role. He has been -- he is going to be the successor. Is it likely he will be accepted as the successor or is there any chance that they'll be some power struggle, some other group maybe representing a different ideology wanting to take control?

CHA: That's a good question and a very hard one to answer. I think on the one hand, this new North Korean leader, this so-called great successor, I mean, there is -- this is dynastic succession in North Korea. They've only had three leaders since the founding of the country and he is now the third leader from the Kim family. And blood is very important. They're not North Korean royalty.

On the other hand, he is so untested, and there has been little opportunity for him to develop this sort of networks he needs to develop in a system like this in order to maintain security of his position and security of power. So I think all of us will be watching this very closely to see what his next steps are and indeed whether there are group with the north that are so unhappy with the current state of the country that they seek to try to challenge his leadership.

VELSHI: All right, a lot more questions and answers we have this morning, victor. We'll all watch very closely. When you get new analysis or intelligence, please share it with us. A very good article in the "Financial Times" by Victor Cha about what we can expect. Victor Cha, a senior adviser and Korea chair at center for strategic and international studies and former not foreign affairs.

CHO: Joining us to talk about North Korea after Kim Jong-il's death is Governor Bill Richardson. He's the former U.N. ambassador who has travelled to North Korea eight times and has helped broker diplomatic deals and win the release of American prisoners there. Governor Richardson, good morning. Thank you for joining us. I guess my first question to you is your reaction when you heard the news?

BILL RICHARDSON, FORMER U.S. AMBASSADOR TO THE U.N.: Well, extreme concern, because North Korea, the peninsula, is a tinderbox. This we knew was coming because of the health of Kim Jong-il. The issue is going to be, will there be stability in the North Korean leadership? Will they continue the recent efforts of engaging South Korea and the United States over food aid, over nuclear talks?

They'd softened a bit, but the question is going to be, first, will the son, the third son we know very little about him, will he really take power with the North Korean military commanders supporting him fully. And secondly, will they continue what recently was a little thawing in the relationship with south Korea, with China, with the United States on the six-party talks, on nuclear talks, on food aid, on remains of American servicemen? Those are the issues.

CHO: Let's talk a little about the successor, Kim Jong-un. Very little is known about him. He is said to be 27, possibly 28 years old, clearly not yet 30. He is said to have studied in Switzerland, is a fan of American basketball, but not much known except that he does not have any military experience even though he's been elevated to four-star general status. A lot of concerns, obviously, about whether he will be a real leader or a puppet. What are your thoughts going forward about that?

RICHARDSON: Well, my thoughts are that the workers party made a statement very shortly ago that basically said that he was the designated leader. That's a sign that there's coalescing around him. Nonetheless, he's the third son. Kim Jong-il side-stepped the first two sons because he didn't think they were adequate for leadership.

We -- he has no military experience. No diplomatic experience. Late 20s. The good news is that he studied in a European school, but other than that, we know very little about him. The issue is going to be will the North Korean military commanders support the succession that Kim Jong-il put forward of his son? That's going to be critical. And I think the next 48 hours will determine that.

CHO: Well, here's my question. Are you more concerned now about stability in the region now than you were 24 hours ago?

RICHARDSON: Well, yes. Yes, of course, because there was a little thawing in the relationship with the United States, with South Korea. North and South were talking. We were going to consider food aid. I think it's important that if the signs are positive that there's a stable succession, and we don't know that, that we engage North Korea, that we proceed with a humanitarian aid. People are starving there. Keep it non-political. But at the same time, keep a very watchful eye standing beside our ally, South Korea. But it's critical that there be very few or no military provocations in the next few hours, in the next few days.

CHO: Well, let's talk a little more about that. South Korea, obviously, North Korea's neighbor to the south. The president, held an emergency cabinet meeting just today. He cancelled all scheduled meetings, saying the country needs to take precautions to maintain peace and stability. Yet their military is on high alert. It seems like a fairly measured response. Do you think it's the right one?

RICHARDSON: It is the right one. But South Korea has to be concerned, because North Korea provoked them in the last couple of years. They attacked an island. They attacked civilians, a ship. So he's right to put them on military alert.

But I think now's the time to just lie low, watch things as they develop. Perhaps engage in a humanitarian level on food assistance. But my sense is that this transition is probably going to happen to the young son. Whether there's a power struggle on who controls what, that still remains to be seen. But at least the titular head will be the third son Kim Jong-un, and we know very little about him. So that's why there's so much uncertainty, why the Korean peninsula is a tinderbox. But it's important I believe that we engage them in a positive way and try to bring them out of that isolation that they put themselves in in the last 20 years.

CHO: I consider both of us very lucky, because we're one of only -- we're only a few people who have been inside, westerners, who have been inside North Korea, and I was there when they unveiled Kim Jong- un, the next leader, the son. You were there more recently. You know, the one thing that struck me is that it oddly seemed even though it was a repressive regime, oddly seemed more westernized. I saw cellphones, street lights, western food, and yet the same repressive regime. You have been there eight times yourself. Just give us an inside look at this country, the most secretive regime in the world.

RICHARDSON: Well, as you said, extreme poverty. People are starving there. They have no industry. Yet at the same time it steams that -- it seems that the population of North Korea is supportive of the government, as much as you know. The issue is whether the North Korean military is supportive of that transition.

But you step into the 1950s when you go into North Korea. A few vehicles. You step into sort of a time warp. But they're good people, hard-working people. They deserve better. And hopefully this new leadership that comes in will open up to the west, will open up and initiate some freedoms and find ways to bring markets into North Korea so that people have a better life.

CHO: We'll wait to see what happens. Governor Bill Richardson, always a pleasure to talk to you. Thank you so much.

RICHARDSON: Thank you.

VELSHI: We'll continue to follow the latest on the death of Kim Jong-il. But we are monitoring several other big stories of the day.

Iran says it captured a U.S. spy and got him to come clean on camera. We'll show you the tape of the alleged confession coming up.

CHO: And GOP presidential hopeful Mitt Romney wins the endorsement of Iowa's largest newspaper. We'll speak with the editor of "The Des Moines Register" about that decision just ahead.

VELSHI: Also give yourself the gift of financial freedom this year. We've got some tips on how to avoid falling into deep holiday debt.

It's 20 minutes after the hour.


VELSHI: It's 24 minutes after the hour. Welcome back. We're "Minding your Business" now. News of Kim Jong-il's death is pushing Asian markets down across the board this morning. European stocks have recovered since the start of trading there. Right now U.S. stock market futures are trading higher ahead of the opening bell. And we're expecting low trading volume ahead of the holiday weekend which could mean exaggerated market swings all week.

The head of the European central bank says it will not increase bond purchases to help Europe with its debt crisis despite mounting pressure from the EU leaders for them to do so. Instead the ECB says it will focus on providing banks in the region with unlimited three- year loans starting with a big offering on this Wednesday. The ECB says it will be up to the banks to decide what they should do with the money.

New this morning, the marker of Saab cars filing for bankruptcy. That puts the 74-year-old carmaker on the brink of shutting down for good. GM sold Saab back in 2010 and recently rejected plans to rescue the Swedish automaker.

Saudi Prince Al-Waleed bin Talal is adding Twitter to his long list of investments. His investment company just bought a $300 million stake in the social media site. The prince said it was part of a strategy to invest in promising high growth businesses with a global impact.

Former commander of the U.S. forces in Afghanistan General Stanlty McChrystal is joining Europe's largest engineering company Siemens. Siemen's is expected to announce today that the retired four star general will chair a board overseeing a new unit and securing more contracts with the U.S. government.

Don't forget, for the latest news about "Your Money" check out the all new AMERICAN MORNING will be right back right after the break.


VELSHI: Good morning. Welcome back to AMERICAN MORNING. It's 28 after the hour. We've got breaking news this morning.

North Korea reportedly test firing a short-range missile as the nation announces that leader Kim Jong-il has died. South Korea's military is on alert and the White House is watching the situation closely. North Korea says Kim Jong-il died Saturday of a heart attack that he suffered while he was on a train. He was 69-years-old, and he held total power over North Korea for 17 years.

CHO: A big weekend for GOP presidential candidate Mitt Romney. He snagged the endorsements of former Kansas senator Bob Dole and "The Des Moines Register," Iowa's largest newspaper. We will speak with the editor of "The Des Moines Register" is just a few minutes.

VELSHI: Southwestern planes bracing for heavy snow, strong winds and icy roads. Blizzard warnings in effect for parts of New Mexico, Colorado, Oklahoma, Texas, and Kansas. Officials warn it could cause dangerous driving conditions.

CHO: No letup in the squabbling over how to pass an extension of the payroll tax holiday. House Republicans are not happy with the Senate's plan to extend the cuts for two more months. House Speaker John Boehner telling NBC the short-term fix is just not acceptable.


REP. JOHN BOEHNER, (R-OH) HOUSE SPEAKER: Two months is just kicking the can down the road. The American people are tired of that. Frankly, I'm tired of it. On the House side we've seen this kind of action coming out of the Senate. It's time to just stop, do our work, resolve the differences, and extend this for one year and remove the uncertainty.


CHO: All right, let's go live to Washington. That's where our Kate Bolduan is standing by live. Kate, here we go again. Good morning. What is the latest?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Hello there, Alina. Yes, I mean, it's really anyone's guess at this point, I'll tell you. But it seemed just as many in Washington and honestly probably many around the country thought that Congress had finally been able to reach a compromise to extend the payroll tax cut.

Here is a new twist in this bitter year-end battle. As you heard from House Speaker John Boehner right there, House Republicans are not happy with the compromise that Democrats and Republicans in the Senate were able to hash out, which would extend the payroll tax cut for two months.

It enjoyed broad bipartisan support in a vote on Saturday, 89- 10. That doesn't often happen in the Senate these days. Regardless, House Speaker John Boehner, as you heard, says the House Republicans are against this, because it's kicking the can down the road, as they like to say here in Washington.

Kind of putting off the tough decisions while they kind of go on their holiday break. He says that if they're going to extend the payroll tax cut at all, which many House Republicans don't think. They don't think it's good policy.

He says it should happen for at least one year, not surprising, Alina, Democrats are jumping all over this now saying the Republicans have two options. Pass what the Senate has sent over, this compromise, or as Senator Chuck Schumer says, they alone will be responsible for letting taxes rise on the middle class.

The White House jumping on it saying it's time House Republicans stop playing politics and get the job done for the American people. So the bitter battle continues -- Alina.

CHO: And you'll be watching it all. Kate Bolduan live for us in Washington. Kate, as always, thank you.

BOLDUAN: No problem.

VELSHI: OK, sobriety, wisdom and judgment. Those are the words according to the "Des Moines Register." The qualities that make GOP candidate Mitt Romney stand out from the other presidential hopefuls.

That's why Iowa's largest newspaper says it gave its endorsement to Romney. Joining us now, Rick Green, he's the editor of the "Des Moines Register."

Rick, good morning. Thank you for being with us. Why -- what is it with you Iowa people standing outside in the morning whenever we interview you? Showing how tough you are?

RICK GREEN, EDITOR, "THE DES MOINES REGISTER": I'm where I'm told to be, Ali. It's 35 degrees here in Des Moines.

VELSHI: You guys are tough. There's no question about it. Tell us why you went with Mitt Romney this time around?

GREEN: You know, the great thing about being here in Des Moines and being in Iowa at "The Register" is that for the past 12 to 15 months we've been able to take a very close look at these candidates.

Scrutinize their positions. Listen to their platforms and most importantly, their vision for the United States. We really felt that Governor Romney focused on the most important issues not only for the state of Iowa, not only for our residents, but also for the United States.

Focused more on job creation, economic development and trying to jump-start an economy that clearly as you reported is having a lot of problems around the entire country.

VELSHI: The last time around, you guys went with McCain. This time you made a reference to why you didn't endorse Romney last time. Let me just show our viewers what you said. We did not endorse him then, but this is a different field, and he has matured as a candidate rebuilding the economy is the nation's top priority and Romney makes the best case amongst Republicans that he could do that. Tell me about that.

GREEN: There are three issues that emerged, I think, as we watched Governor Romney's campaign. One, we thought that he knew the issues a lot better than what he did four years or so ago, much more articulate, had a better grasp not only on domestic issues, but also international issues.

The fact that he really focused extensively on job creation and the development of the economy was able to allow us to take a close look at what he was able to do as the capital and in the 2002 Olympics in Salt Lake City.

But I think that it would be wrong to say exclusively his CEO experience without his very focused commit to bipartisan collaboration and cooperation in Washington. While we've seen throughout the entire campaign, Ali, is that the candidates have seemingly tried to jockey and one-up each other if you will, who could wield the biggest wrecking ball at Washington.

Romney that shown to us and what we have heard repeatedly now, not just one or two different meetings and visits, consistently throughout this campaign, he goes to Washington, tries to ignore the Rs and Ds. Focuses exclusively on how to you bridge this great divide I think right now is affecting Washington?

And it's going on throughout the entire country, including here in Iowa. The consequences of the lack of bipartisan collaboration are being felt. You just reported it yourself in terms of this payroll tax debate that's going on.

VELSHI: Well, we sure have. You've actually have a nuance in the editorial that I want to address with you, because some people criticize Mitt Romney as being a flip-flopper. They say he's the ultimate politician at time when people want anything, but a traditional politician.

But you're actually pointing out what you're saying now, that his tendency to pick his way and move his way through political mine fields might actually be exactly what the country needs. I want to read a line from the editorial where you talk about his evolution with respect to abortion.

You say voters will have to decide for themselves whether such subtly nuanced statements express Romney's true beliefs or if he's trying to have it both ways. But you think that his ability to be nuanced is what the country needs more than the ability to stand firm on one position?

GREEN: I think what we have seen, Ali, not just here in Iowa, but really throughout the entire past four to five years or so, Governor Romney's entry into the public service as a presidential candidate. He has morphed himself, transforms from an independent to a moderate Republican, and a liberal Boston with the Massachusetts legislature to now a proud conservative. I think throughout that entire transformation he has taken a very close perspective of the issues he has traditionally had beliefs on and in some cases adjusted it.

He's acknowledged that he has made some mistakes in the communication of it, but what we found was very refreshing. You had a candidate who acknowledged that perhaps different positions at different times and responses to some of the things that are unfolding in this country. I think that shows some maturity on our behalf.

VELSHI: Rick good to talk to you, as always. I hope you don't have a lot of these lined up, so you can get a little warmer. Rick Green is the editor of "The Des Moines Register." The newspaper has endorsed Mitt Romney.

CHO: Good talking native, anyway.

VELSH: Yes, I'm always impressed with people who do winter morning hits outside.

CHO: That's right. Blizzard warnings meanwhile in effect for parts of the South Western United States and a possible snow in Toronto on Christmas. Rob Marciano tracking it all for us in the Extreme Weather Center. Rob, good morning.

ROB MARCIANO, AMS METEOROLOGIST: Good morning again, guys. We start you off with unusual snow just east of San Diego. This is what happened over the weekend. This is part of a system that's going to be rolling into the plains this morning.

This is about 30, 40 miles east of San Diego, obviously, at a higher elevations and snow came down as low as 3,000 to 4,000 feet. We're going to get it to the high plains, which has elevations, 2,000, 3,000 feet, but that's not really the main cause of this.

Cold air is going to be driving down to the south. There's your energy. Here's your moisture so blizzard warnings have been posted for a good chunk of the Texas panhandle, including parts of North Eastern New Mexico, Colorado and Western Kansas, 12 to 15 inches of snow potentially with this over next 36 hour beginning pretty much right now.

All the rain will slowly turn to snow for the next couple of hours and the wind is going to be big issue especially on the back side of this thing as it moves off towards the north and east. The southern part of this from Dallas down to Houston is possibility seeing some strong thunderstorms this afternoon, some of which could become severe.

Moisture continues to roll up towards the north and east. Temperatures rebounding across the northeast. Chilly start, yes, but yesterday you finally stayed below the freezing mark. We'll get up to 47 in New York City, 61 degrees in Atlanta.

So there's your rebounding temperature, really the trend all season long and really the storm track continues to be one, which keeps most of the cold air north and west of the east coast cities.

So as this storm progresses up towards the great lakes, that storm track keeps everybody east and south on the warm side of this. So most likely, sporadic rains with the next couple systems that come across the northeast, but upstate New York, western great lakes and parts of southern Canada, including Toronto may get light snow Christmas Eve and Christmas day.

CHO: See?

VELSHI: There you go. I'm chasing the snow this year, Rob.

MARCIANO: That-a boy -- pictures.

VELSHI: You made my morning when you tweeted that Toronto might get some snow on Christmas Eve. I won't hold you to it. Just like you don't hold me to the stock market, you know --

MARCIANO: Perfect. That's why we get along.

VELSHI: That's exactly right. Good to see you, Rob.

All right, new this morning, the final U.S. troops leave Iraq ending the nearly nine-year war. The last 500 soldiers crossed over to Kuwait on Sunday.

At the height of the battle, some 240,000 military members were stationed in Iraq. The Iraq war cost nearly 4,500 lives and more than $800 billion. The U.S. will maintain a small civilian presence in the country.

CHO: Secretary of State Hillary Clinton is urging Egypt's government and protestors there to show restraint. But neither security forces nor protesters are backing down, at least not yet. Over the past four days alone, violence on Cairo's streets had left at least 10 people dead and 500 injured.

VELSHI: Iranian officials say they captured a U.S. spy and secured a confession on camera. A TV station in Iran aired the alleged confession on Sunday. The man in the video says he joined the U.S. Marines in 2001 and got special training before being sent to Iran. U.S. authorities have not commented on the authenticity of the report.

CHO: Penn State is rejecting CNN's request for a copy of a 1998 police report against former football coach Jerry Sandusky. A university lawyer saying the school doesn't fall under Pennsylvania's Right to Know Law.

The mother of one of Sandusky's accusers alleged the then coach that he showered and hugged her son. No charges were filed in that case. Now Sandusky is accused of more than 50 counts of sexually abusing young boys. VELSHI: Tropical Storm Washi devastating the Philippines this weekend. Killing more than 650 people. Hundreds are more missing. According to the Philippine Red Cross, Washi swept the southern part of the country flooding cities and destroying property over 100,000 people had been displaced.

CHO: As we continue to follow this breaking news of the death of Kim Jong-il, a rare look inside North Korea. I traveled to Pyongyang last October as the country started grooming a new dictator, the third son, Kim Jong-un. An opportunity few western journalists have had. We're going to share it with you next.

VELSHI: Also, you're tired of bringing in the New Year with last year's Christmas bills? If you are, we'll tell you how to make this a debt-free holiday. You're watching AMERICAN MORNING. It's 40 minutes after the hour.


VELSHI: Good morning. We're following the breaking news this morning, the death of the North Korean dictator Kim Jong-il.

CHO: That's right. I was given the rare opportunity to report from inside North Korea last year when the nation put on a show of military might for his heir apparent. It was a stunning glimpse inside one the most secretive nations in the world. Take a look.


CHO (voice-over): Your eyes are not deceiving you. This is communist North Korea. It's newest attraction, this Western style amusement park and it is packed.

There's a ride called power search. Take a look inside the food court. You'll find western fare. This family comes here often to unwind.

He says words cannot explain the excitement after working so hard. General Kim Jong-il has given us this park to relax. We really love it.

If North Korea is Stalin's last playground, this is its version of Disneyland. Not far at this outdoor food market, they're serving up more traditional fare, like soybean pancakes.

And people are paying, like their enemy neighbors in South Korea, North Korean currency is also called the won, but this money features a hammer and sickle. One hundred North Korean won equals one U.S. dollar.

That will get you two sweet potatoes, one ticket to the amusement park or a hot dog at the food court. In the two years since I last visited North Korea, I've noticed some changes. For one, more average North Koreans speak English.

(on camera) Do you like coming here? UNIDENTIFIED MALE: Yes, very much.

CHO (voice-over): For the first time there are traffic lights installed this spring. Most notably in a country closed off to the rest of the world, North Koreans are now talking on cell phones. This girl says everyone in her family has one, but international calls are forbidden, word is punishable by death.

In that way, and others, time stands still. We can only see what our government minders want us to see, and undeniably, it's North Korea's best face. Many North Koreans live in poverty. There are very few cars. In this city, there's no such thing as a traffic jam.

(On camera): This is Pyongyang's subway station, one of two main hubs, and one of the main forms of transportation for average North Koreans. Many don't own bikes let alone cars, so this is how they get from point A to point B, and today the trains appear to be running on time.

(voice-over): And many travel on foot. On the streets, there are no ads, just propaganda, and listen -- they not only see the message, they hear it, North Korean propaganda songs blaring across Pyongyang.

(on camera): So look what we happened upon here. We're in the middle of week-long celebrations here in North Korea commemorating the 65th anniversary of the Workers Party of North Korea. This is how people are celebrating. They're literally dancing in the street.

(voice-over): It's possible they're also celebrating the choice of their next leader, Kim Jong-, s Son of the ailing dictator Kim Jong-il.

For all the small changes we've seen, the larger question remains, will a change at the to that effect the average citizen? For now, North Korea remains sealed.


CHO: And you know that was October of 2010.

VELSHI: Just over a year ago.

CHO: That's right. The big question still remains. Will it ever open up to the rest of the world?

VELSHI: That looks so normal and fun. It's not everywhere.

CHO: Absolutely not. I mean, listen, you cannot go anywhere without a government minder. They watch your every move. I think it's important. I think westerners have a really hard time grasping that, that North Korea is unlike any other place on earth. It is literally sealed off. There's no Internet access. Few residents have a television sets.

You know, if you just look at what happened to us when we arrived. You landed in Pyongyang. Immediately your passport is confiscated. Your blackberry is confiscated, your cellphone is taken. You don't get back until you leave. Often the battery is drained from your phone. And there's no record you were ever in the country.

VELSHI: Alina, a lot of the people in North Korea do have relationships with people in South Korea. What happens to them, because a lot of people in South Korea came from North Korea.

CHO: That's right.

VELSHI: Do they know what life is like? South Korea is one of the most open and technologically advanced industrial nations in the world.

CHO: It's interesting. When you look at North Korea and South Korea from above, you see all the lights on in South Korea. And North Korea looks pitch black. You know, I actually have relatives. My father's two uncles disappeared during the Korean war. We don't know what happened to them. Presumably if they're still alive they are in North Korea.

But it is -- I was talking to Wolf Blitzer over the weekend, and it really -- we were trying to explain what it is like to be inside that country. It almost defies definition.

VELSHI: That's why they call it the hermit nation. It's really the hermit kingdom.

CHO: That's right.

VELSHI: All right, still to come this morning, some important tips on how to have a great holiday this year without paying for it through 2012. We'll tell you about it when we come back. It's 49 minutes after the hour.


CHO: Here's what you need to know to start your day. North Korea announcing the death of Kim Jong-il. The world reacting to the death of one of the most repressive dictators in the world. North Korea says Kim Jong-il died Saturday of a heart attack he suffered while he was on a train. He was 69-years-old and held total power over North Korea for 17 years.

House members are expected to take up the Senate's payroll tax cut plan. It includes a two-month extension. House Speaker John Boehner says he wants a full year extension.

A fourth hearing today for Army Private Bradley Manning. He's accused of leaking hundreds of thousands of government documents, many of which were posted on WikiLeaks. Sunday investigators said Manning's computer had downloaded those secret documents.

The board of trustees at Florida A&M will consider whether to suspend the school's president in the wake of a hazing scandal. Last month a drum major was killed in a suspected hazing. His death has been ruled a homicide.

And nobody is perfect this year. The Kansas City Chiefs totally stunned the Green Bay Packers yesterday, handing them their first loss of the season. And 19-14 was the final score. The packers are now 13-1 for the year.

Caught up on the day's headlines, AMERICAN MORNING is back after this.


VELSHI: Welcome back. This time of year it is easy to overspend on all of those gifts for loved ones. Everybody is not out there necessary bargain hunting, right. You're trying to get that list done.

CHO: Less than a week away from Christmas, overspending is a problem I have around the holidays, you know. So how do you avoid falling into that holiday debt trap? Christine Romans has some I mean tips in this morning's "smart is the New Rich."


CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: The worst present you can give yourself for the holidays is more debt. Are you listening Congress? Don't buy that hype that you need to add to next year's debt this year. No sale, no hot holiday toys, no impulse purchase is worth it at 20 percent of your credit card. First, if you can't afford it, put it down.

GAIL CUNNINGHAM, NATIONAL FOUNDATION FOR CREDIT COUNSELING: In a perfect world you would never charge more than you can pay in full when the bill arrived. Worst case scenario, plan to pay it out no longer than three months.

ROMANS: Track your spending. The National Foundation for Credit Counseling surveyed shoppers and found 56 percent had no idea where they spent their money by the end of the month.

CUNNINGHAM: We work very hard for our money and then spend it very casually. You will never know where the leaks are until you write down every cent you spend for 30 days. Seeing your spending staring back at you in black and white is a real wake-up call.

ROMANS: Prioritize your debt. Credit card debt is particularly unforgiving, even with new protection. Aim to pay it off. The best boost to your credit score is paying off big amounts of debt and then paying on time every time with the card after that. Did you know a missed payment stays on your credit history seven years? Finally, make it your resolution to get out of debt and stay out of debt in 2012.

RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Go to to see how much you owe. Organize your debt in terms from smallest on the bottom to largest on the top. Start calling your creditors to maximize and reduce the interest rate. Going into 2012, this is one of the best things to do to organize our own financial futures and get that right peace of mind.

ROMANS: Christine Romans, CNN, New York.


CHO: You have an interesting tip or question you should ask yourself.

VELSHI: When you buy something, it should outlast how long it takes you to pay for it. So you don't pay for a TV over five years if you're not going to have it over five years. Education counts, houses count, in many cases a car loan. If you're taking a five-year loan on a car for three years, that's the way to think about things.

CHO: And shoes?

VELSHI: Shoes is an area of expertise that is not my own. I've got about two pairs and this is one of them.


CHO: Ali Velshi, thank you.

VELSHI: Ahead this hour, we've got a lot of news on the death of Kim Jong-il and the implications back here in the United States.

CHO: That's right, fears about a power vacuum in a nuclear nation. We will have reaction live from around the world just ahead.