Nightly News   |  April 21, 2011

Obama asks: Is gas price-gouging to blame?

President Obama on Thursday asked the Justice Department to investigate the possibility that fraud and manipulation in the energy markets could be driving gas prices higher. CNBC's David Faber reports.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> all of this leads us to david. you heard kristen just say traders, speculators. what role do they play in what we pay per gallon, and what leverage could the president possibly have here?

>> yeah, a very good question and one that is hard to answer in many ways. we don't know how much they contribute to the rise in the price of oil. there's speculation in oil, as there is in virtually every market. you want speculators because they add their dollars, there's rr more money, hence better prices, so to speak, for the commodity, but they're there, whether you can crack down on them is something that remains to be seen, in part because it's hard to define speculation versus fraud, which the president also brought up.

>> secondly, all we talk about these days is the economic downturn, how hard it is on so many of the families, so many people watching us every night, yet first quarter profits are in from 2011 , and boy are some people finding a way to make money. apple up 95%. ge up 77%, and jpmorgan chase up 67%. that's a number of $5.6 billion. how does that work?

>> it means things are working for those corporations. apple, we know, lots of people are buying ipads, ipods, iphones. in the case of the other two, corporation america is dealing with a more normalized environment, the one that deals with the prerecessionary days that saw the huge problems in 2008 and 2009 and parts of 2010 . they're generating a lot of profits. the key point that many people at home need to keep in mind is they're doing that also by having less expenses. the real question is will they start to return to significant robust hiring of american workers? that's the key question because profitability is very strong right now, and it's not clear they need to hire that many people.

>> we have all seen how they have reduced expenses wroorb.