North Korea Throws Temper Tantrum: Analyst

North Korea's launch of a multi-stage rocket Sunday, which flew over Japan before splashing down in the Pacific Ocean, was effectively a test of a ballistic missile designed to carry a warhead as far as the U.S. state of Alaska, analysts say.

The U.S. military and South Korea said no part of the Taepodong-2 rocket entered orbit. In the only previous test flight of the Taepodong-2, in July 2006, the rocket blew apart 40 seconds after launch. The rocket is designed to fly an estimated 6,700 km.

The failures of Taepodong-2 seems to suggest that North Korea still has a long way to go from being able to deliver the rocket, whether or not they're nuclearized or weaponized.

David Roche, global strategist with Independent Strategy Ltd., agrees that North Korea is not particularly competent in terms of technology.

"The problem with people who are technically incompetent is that when you give them a dangerous weapon or even half a dangerous weapon, their incompetence can set it off as easily as it can -- you know, make it misfire and drop it in the Pacific Ocean," Roche told CNBC.

(For the full David Roche interview, please click on the left)

"The thing about this little man, Kim Jong Il, is that first, he is an entirely nasty bit of work, and secondly, is that of course, he's totally unpredictable. So the fact that they're technically incompetent doesn't mean you shouldn't be afraid of them," Roche adds.

But the United Nations failure to agree on a response to the rocket launch despite pressure from Washington and its allies for action, seems to be working in North Korea's favor.

"North Korea is playing the Iranian card. There are lots of bits of the diplomacy thing that are being called into question -- like China has no influence on them, that's clear. The six party talks have no influence on them. But now what North Korea is doing is saying, 'Hey look Mr Obama, you're offering all sorts of goodies to Iran if Iran is nice to you. How about us? Look we're going to be really nasty we're gonna throw all our toys out of our playpen, and scream and holler, and you better tell us what sort of goodies are in store for us and then we might play ball," Roche said.

It would see that North Korea is playing a negotiating game. It's operating along a psychological level, to get on the same level of attention from the U.S., as Iran is getting. And yet, markets in Asia have not reacted to these tensions.

South Korean and Japanese financial markets shrugged off the news on Monday, with both the Nikkei and the KOSPI up over 1 percent at midday, while the won currency was stronger against the dollar as investors cheered Wall Street's gains last week.

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"I think the reaction from the markets is going to be practically non-existent after a day or so because this is essentially a bargaining process. The markets will recognize it for what it is -- it's not an immediate disruption or threat to anybody or anything," Roche concludes.