While the global plan to recapitalize banks will probably be bad for his business, driving prices higher at a time when he has the cash to buy, it is necessary and smart, real estate developer Donald Trump said Tuesday.
"We were headed for Great Depression No. 2," Trump told "Squawk Box."
As a free-market capitalist, Trump admitted feeling uncomfortable at the "artificial" injection of cash into banks, but said it was a much better idea than the original plan just to buy up distressed assets.
"It's almost socialistic, but I like it, really like it," he said. (Video: Trumps full comments)
Considering that bankers who are paid to study every aspect of bad loans couldn't value toxic debt made the plan for the government to buy bad debt a non-starter, Trump said.
"Some government guy was going to buy all the bad loans -- I don't get it," he said.
Housing is the Biggest Industry
While the plan addresses the problem of capital for banks, the root cause of the housing problem also has to be addressed, he said.
"If a person has a mortgage that's coming due, they have no way to refinance it," he said. "Something has to be done about refinancing and financing for people who want to buy houses, apartments."
"The biggest industry in the world is the housing market … and boy did we take a hit," Trump said.
But the credit markets will never be totally taken care of if oil rises again, he said, adding that oil should be $40 to $50 a barrel.
A Day Too Late to Buy Stocks
Trump also said he considered buying stocks for the first time on Monday, but didn't get in fast enough and hesitated when the stock index futures took off.
"For the first time in my entire life I was going to go very big into the stock market, hundreds of millions of dollars into the stock market" he said.
"Now it's a little too late," he said.
- Video: See the full interview here