Stinson Dean on the Lumber Crash That Followed the Boom

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:16)

And I'm Tracy Alloway.

Joe Weisenthal (0:18)

So, you know what one of the things I really like about 2021 is?

Tracy Alloway (0:25)

About 2021?

Joe Weisenthal (0:26)

Yeah, or 2020 and 2021

Tracy Alloway (0:30)

I mean, I feel like I could take a guess, but why don't you go ahead and tell me?

Joe Weisenthal (0:34)

Well, so obviously, like, okay, we've been doing a bunch of supply chains and commodities, but I feel like this is a time for specialists, like people who know.

Tracy Alloway (0:46)

Oh, yes.

Joe Weisenthal (0:47)

Yeah, and it's, I feel like one of the themes of kind of like this podcast, but also in general is like, I'm kind of like weirdly less interested in some respects in some of like the pure macro stuff that we've like, I've covered for much of my careers. And the people that I really yearn to talk about are like the people who just like know an industry really well. I think it's like super fun.

Tracy Alloway (1:09)

Yeah, I think we've discovered the wonders of micro and just being able to investigate these individual markets that we haven't necessarily been familiar with before has been really, really interesting. And also, I think I told you this once before, but when I was going into financial journalism, I always really wanted to be a commodities reporter because I was kind of interested in things and like this idea of global trade.

And 2020 and 2021 has just been phenomenal from that perspective, like the actual study of things, like how they're produced, how supply and demand works for individual markets, the different players plus the logistics of actually moving them from A to B.

Joe Weisenthal (1:47)

No, this is a year for granularity for specialists and the degree, you know, like if I want to understand what's going on in the commodity market or I want to go understand what's some aspect of the labor market, I'm not going to like ask some like, you know, there are certainly like macroeconomists who are useful and we talk to them all the time and we've had them on recently.

Tracy Alloway (2:06)

Well, we just spoke to Matt King, right?

Joe Weisenthal (2:08)

Yeah, yeah, yeah, yeah, so, you know, I would not want to slag any of our other guests, but I really like, there's so many things now where it's like, we got to talk to someone who knows this thing and that's sort of been one of the fun things, I guess I would say about learning and talking to people in 2021

Tracy Alloway (2:27)

I mean, what I will say, and Matt King kind of brought this up on the recent episode, but there are micro explanations for almost every move in the price of something that people have been talking about recently. So, we've been speaking a lot about individual commodities.

We did like one on sinks. I remember I wrote about mayonnaise. You can look at a particular product or market and come up with an individual perspective, but at the same time, all of that are feeding into this broader macro backdrop where people are worried about inflation. And we've been talking about that a lot as well.

Joe Weisenthal (3:04)

Right, so one of the first, we've had a bunch of these, but one of the first episodes that was kind of like one of the breakout for us, 2021 episodes that was like really extraordinary that we learned a ton about was back in April. And we talked to Stinson Dean. He is the founder and CEO of Deacon Lumber, which is a lumber trading operation. And if you recall, Lumber was interesting because I guess it was like kind of like the canary in the coal mine in a way, because now we have this huge global commodity run, like major bull market and basically everything you can think of. But at the time, I think commodities were running, but we did not, you know, lumber was like this parabolic move. And we're like, what's going on there? This is kind of weird.

And now we've seen tons of commodities, European energy and natural gas and coal and stuff. Some of it's cooled down. But lumber was kind of like this canary in the coal mine.

It's soared like crazy. And since then, it's actually one of the few commodities over the last few months that's kind of been in like a bear market. It's almost feels like it's been to like a few months ahead of everything else.

Tracy Alloway (4:14)