MONEY Travel

5 Great Places for Your Fantasy Football Draft

Starting this weekend, fantasy footballers across the country will be gathering to draft their teams. Here are 5 great places to go for the annual ritual, and ways to have (more) fun after you've picked your players.

The arrival of August may mark the middle of summer, but for many people it can mean only one thing: the start of fantasy football draft. Across the country, owners of virtual teams will be gathering to pore over stats, pick their players, and talk strategy. Also drink beer, talk trash, and generally make merry.

Like bachelor parties without the wedding, these gatherings are morphing into full-blown guys’ weekends, complete with travel opportunities and fantasy football-themed special activities. If you want to know where to go to find some of the best action, check out our 5 top picks for draft-weekend destinations.

 

Las Vegas at night
Cindy Costa—Flickr

Las Vegas

Yes, it’s a cliche, but with good reason: Vegas is an awesome place to be a fantasy football fanatic. The city is one of the few to host big draft-day parties and events, drawing sports fans from all over the country. And of course, there’s great food, tons of shows, packed clubs, and raging pool parties. Oh, and did we mention casinos? There are a few of those, too.

Where to Draft
How hardcore does your league want to get? If you want to be immersed in football mania, head to the Ultimate Fantasy Football Draft Party, thrown by the Yahoo Sports and Hard Rock Hotel on August 23. To attend, RSVP here. You can also book a FF package at the hotel, with discounted rates starting at $59 to $149, between August 21 and August 24. Packages include entrance to the party and a slew of other perks, like passes to the Hard Rock’s daytime pool party and nightclub.

If a corporate blowout doesn’t appeal, there are plenty of good ways to “freewheel it,” says Joe Fortenbaugh, a writer for VegasChatter.com and co-owner of news site National Football Post. On the high end, you could rent a suite or cabana. Fortenbaugh recommends cabanas at the quieter pools, such as Boulevard, at the Cosmopolitan Hotel. For something a bit cheaper, he suggests a big table or private room at Carmine’s, an Italian restaurant that recently opened at Caesar’s Palace and serves up giant family-style portions of lasagna and chicken parm for about $35. To go with something more bar-centric, try the Eastside Lounge at the Wynn. This low-profile spot has plenty of room to spread out and set up camp. “No one recognizes how great it is,” Fortenbaugh says.

When You’re Done
Well, there’s plenty of gambling to be done, but you already knew that. What you might forget is just how much great food the city has to offer, so be sure to branch out beyond the draft-appropriate spots. John Curtas, author of Eating Las Vegas: The 50 Essential Restaurants, recommends Five50 Pizza Bar, an “absolute must” for everything from your basic margherita to the “Picante,” featuring ghost chili salami. There are also a ton of affordable shows to choose from. For instance, Travelzoo is now offering a deal for the latest Cirque du Soleil, starting at $55, down from $99. Finally, take a break from the Strip. Head over to Fremont Street to check out the Gold & Silver Pawn Shop made famous by the “Pawn Stars” TV show. Fortenbaugh also suggests seeking out Sigma Derby, the old-fashioned horseracing game you’ll still find at The D Hotel and Casino.

Where To Stay
The Hard Rock is far from the only hotel offering fantasy football discounts and packages. Caesars Entertainment, for one, has deals at hotels like Harrah’s, Bally’s and Planet Hollywood (costs vary by date and property). In general, room prices tend to spike on weekends, says Travelzoo editorial director Andrew Young. However, right now the Palms is offering some August weekends for as low $99, he notes. Don’t forget to factor in “resort charges,” which can easily add $20 a day to your booking. To avoid them, try a property off the strip. Young suggests the Platinum Hotel, which lists mid-August rooms starting at around $130 per night.

 

Miller High Life Cruiser
Flickr

Milwaukee

This Wisconsin city has a reputation for cheese and beer, perfect for a weekend draft. But it’s the outdoor activities and proximity to Lake Michigan that make Milwaukee the perfect spot for those fantasy leagues looking for a little activity in between picks.

Where to Draft
If you want to draft next to the beautiful waterfronts in town, then look at Stubby’s Gastropub. With views of Lake Michigan, it has “a nice patio over the Milwaukee River and plenty of TVs,” says Milwaukee Journal Sentinel dining critic Carol Deptolla. They offer 53 craft brews on tap, including some local favorites like Fixed Gear ($5) and the Black Husky Howler ($8). While there, take advantage of a Wisconsin tradition by ordering the cheese curds appetizer ($9.95), with Stubby’s bacon Parmesan dipping sauce on the side.

For a more local sports-scene feel, check out Steny’s Tavern. Located in the downtown area, near many hotels and local attractions, it’s known for chicken wings ($8.99 for 16 wings) and Bloody Marys ($4.50). Plus, after you select that starting quarterback, you can even catch a free shuttle to the Brewer’s game if the team is in town.

When You’re Done
Known as the Great Place on a Great Lake, Milwaukee Bay is ideal for burning off that post-draft energy. You can charter a fishing boat to take you out for an afternoon of reeling in salmon or trout. Silver King Charters charges $500 for five hours, but if you don’t catch any fish it’s free. Big groups take note: the boats only fit six people.

You can also rent your own pontoon boat to take you up and down the Milwaukee River. Edelweiss Boats takes 10 people ($240 for four hours) and you can bring food and any Brew City beverages you would like.

For landlubbers, Milwaukee and its surrounding area is home to over 40 miles of hiking trails. In town, check out the Seven Bridges Trail in Grant Park. This two-mile trek will get your mind ready for the regular season, as you wander through rocky trails before hitting a clearing where you can capture views of Lake Michigan.

Where to Stay
You can find some great deals from big name hotels in the heart of Milwaukee for much less than you would pay in other cities. Downtown, the Intercontinental offers double rooms for $150, after taxes. Check out the downstairs coffee bar Clear, which turns into an indoor bocce ball court on Tuesdays and offers live music on weekends.

There’s also the DoubleTree by Hilton, which is located blocks from the Milwaukee Public Museum and Marquette University. Double rooms run about $190 after taxes. But you can save 20% by paying the full amount upfront; you lose your money, though, if you’re unable to make the trip.

 

Belle of Louisville steamboat
Flickr

Louisville

The Gateway to the South and home to the Kentucky Derby offers nearby beautiful rolling hills and quiet southern living. But for a fantasy draft, it’s the bourbon and food that will have you convinced you made the right pick.

Where to Draft
Louisville has plenty of bourbon and barbeque, so finding spots that offer both—along with Wi-fi—is key to a successful draft in the Gateway to the South. Against the Grain, a brewery and smokehouse in a former train station, has the Louisville Bats minor league baseball stadium as a backdrop. While it’s worth tasting the beer brewed in-house, ATG also offers more than 35 bourbons, all bottled just hours away. It’s great for groups, with space for private events, and the beef brisket ($14) or pulled pork ($10) will leave you in a food coma following your last pick.

Momma’s Mustard, Pickles & BBQ is another option. Created by a lover of Kansas City BBQ, the owner took horse race winnings—it’s Derby City after all—to buy a food truck. With its success, he opened a location in the heart of Louisville. In true Kansas City fashion, try the burnt ends ($10 with two sides).

Want a slightly classier setting? Try Sidebar. Choose from more than 50 bourbons and upscale burgers like the Hung Jury ($13), which is layered with bourbon mushrooms, onions, and beer cheese.

When You’re Done
If your group wants to stick with the bourbon theme following the draft, then take a trip out to the Bourbon Trail. Two hours south of Louisville is official bourbon country, with distilleries including Maker’s Mark, Jim Beam, and Four Roses, among many others. They offer daily tours for as little as $5, which often include a taste or two of the local product.

Without a car, getting out to the Bourbon Trail can cost a penny; expect to pay $100 or more for private bus tours. As an alternative, you can stay in Louisville and follow the Urban Bourbon Trail, 20 bars and restaurants with an historical link to Louisville’s drinking tradition, like speakeasys that sold liquor to Al Capone or hotel bars that F. Scott Fitzgerald frequented. And by staying in Louisville, you can honor the end of your baseball fantasy league by stopping into the Louisville Slugger Museum. There you will see how the bats that have been used by professional baseball players since the late 1800s are made. It’s $12 to get into the museum—and don’t forget to pick up your free mini-bat on your way out.

Where to Stay
There’s no shortage of great hotels for cheap in Louisville, like the Marriott Downtown ($179 per night). But if you don’t mind close quarters, there are also a number of AirBnB homes that can accommodate a group of eight or 10. This AirBnB condo sits near the Louisville Slugger Museum, and the owner says it fits 10 beds, so the loser of the draft won’t end up on the floor. It’s an “industrial chic” condo that has glassmaker studios and galleries as neighbors. With all-in charges running $1,611, the split is a reasonable $161 per person.

If you don’t mind sleeping on a couch, this Airbnb option is only an 11-minute drive to downtown and priced at less than $500 total. A steal, about which other large groups have said, “we had plenty of room.” And there’s a fire pit outside, so you can even end the weekend with your own style of BBQ.

 

Baltimore harbor
Ken Stanek—Visit Baltimore

Baltimore

Home to the 2012 NFL Super Bowl Champion Ravens (as well as Edgar Allan Poe and Carmelo Anthony), Baltimore offers fresh seafood and host of entertainment in the Inner Harbor. It’s also an easy 20-minute drive from international hub BWI Airport, making it easy for friends spread across the country to reconnect.

Where to Draft
Former speakeasy The Owl Bar, inside the Belvedere Hotel, offers a host of craft beers on draught, in addition to classic cocktails (think Moscow Mule) and signature drinks. In between sips, you can feast on an assortment of pizzas, like one topped with crab dip ($14), or go for the Umami Burger ($11), which comes with truffle garlic aioli.

Seafood lovers can check out Ryleigh’s Oyster, in Federal Hill. Starters include crab pretzels ($11)—three pretzels topped with a blend of crab, cheese and seasoning—and cast-iron crab pot ($13). For family-style dining, dig into a pound of mussels ($10) or a half-dozen oysters ($12) between roster selections.

When You’re Done
Catch a baseball game at Camden Yards, one of the most aesthetically pleasing ballparks in the country. If you’re still hungry, grab an authentic Maryland crab cake and some Boardwalk Fries.

Or, if you’d rather get some exercise after four or so hours compiling your team, check out the BWI bike trail. It’s a 12.5-mile scenic trail that encircles BWI and passes the Thomas A. Dixon Jr. Aircraft Observation area and the historic Benson-Hammond House, built in 1820.

For the more culturally inclined, there’s the Walters Art Museum in Baltimore’s historic Mt. Vernon cultural district. The museum is free of charge and is currently featuring an exhibition on music in the Middle Ages.

On your night out, sign up for a two-hour tour on the Charm City Pedal Mill. This 16-person bike is a great way to see historic Fells Point in downtown, and with 10 people only costs $31 per head.

Where to Stay
A member of the Historic Hotels of America, the Hotel Brexton offers rooms for $160 a night (with internet and parking included), and is only 10 blocks north of the Inner Harbor. (Wallis Simpson once stayed here.)

Of course, you could also use your group’s numbers to your advantage and stay in a house. This AirBNB.com listing smack dab in Little Italy costs around $240 a person for three nights and sleeps eight to 10 in its three bedrooms. Plus you’re just a quick jaunt from the Inner Harbor.

 

Sea Lions in San Diego marina
JD Lasica—Flickr

San Diego

Want to draft in your flip-flops? You’ve come to the right place. This hopping college town has a gorgeous beach, top-notch Mexican food, and plenty of football fans (go Chargers!). Hops heads will also dig it: San Diego has emerged as one of the nation’s best craft beer destinations.

Where to Draft
San Diego is packed with sports bars. Bub’s @ the Ballpark is hosting draft parties on a couple of August weekends. The bar will be offering food specials and $14 pitchers. The Tilted Kilt is also taking reservations; drafters will get happy hour prices ($3 drafts and $2 to $5 apps) and can connect their laptops to the bar’s big-screen TVs to put the action on full display. Want a spot that focuses on craft beer? Mike Shess, publisher of West Coaster Beer News, recommends The Beer Company, a brewery and restaurant.

When You’re Done
If you’re not tired of beer, take a beer tour. Brewery Tours of San Diego runs a variety of itineraries, starting at $65 a person. Shess suggests choosing a tour that hits spots like The Lost Abbey and Stone Brewing Company.

Now that you’ve got that out of your system, get outdoors and enjoy the SoCal sunshine. San Diego Bay Adventures rents jet skis for $99 an hour. For a more affordable (and quieter) version, try a standup paddleboard ($35 for two hours). Or take an Xplore Offshore tour. You can spot whales, porpoises and other marine life from a “tricked-out” Navy Seal-style boat that puts you very close to the water’s surface, says Ann Wycoff, a contributing writer for San Diego magazine and the co-founder of travel site Wandermelon.com. Prefer to stay on land? Spend a few hours hiking Torrey Pines for amazing views.

Where to Stay
Try The Pines, a “groovy” boutique hotel, says Wycoff. The retro-chic downtown hotel is a quick ride to the bar-packed Gaslamp district. In mid-August, rates start at about $160. If you’d prefer to stay right in the heart of the action, the swanky Hotel Solarmar is another good choice, with August rates ranging from $157 to $400 on the most popular weekends. Don’t miss the property’s swim-up bar, says Travelzoo senior editor Gabe Saglie.

 

MONEY Investing

Why the Best Investors Totally Stink at Fantasy Football

Minnesota Vikings running back Adrian Peterson
Jeff Hanisch/USA Today Sports—Reuters

Fantasy football drafts have begun. Here's why thinking like a long-term investor can ruin your season.

Last November, one National Football League running back had a particularly good day.

Strong, agile, and quick, this player absolutely tore apart the Atlanta Falcons defense on Nov. 17 to the tune of 163 rushing yards and three touchdowns. Fantasy football owners fortunate to have him on their rosters were awarded almost 35 points from his performance alone—more than a third of the total usually needed to win a whole game.

So who was this guy? Future Hall of Famer Adrian Peterson? The Philadelphia Eagles buoyant halfback LeSean McCoy? Jim Brown? No, no, and of course not. He was an undrafted second-year player out of Western Kentucky named Bobby Rainey. Who, you ask? Exactly. On that same day Peterson himself, perhaps the greatest running back since Jim Brown, ran for 100 fewer yards than Rainey and never touched the end zone en route to a pedestrian 8.5 fantasy points.

It’s hard not to look for a lesson in this episode. And for someone like me, immersed in the investing world, the inclination is to draw a parallel to value investing, the discipline made famous by Warren Buffett. Value investing involves looking for companies that the market does not fully appreciate in hopes that, over time, they will outperform expectations and send the stocks soaring.

But as the fantasy football season gets under way, with millions of fans around the country drafting players over the next few weeks, I’m here to tell you that a Buffett-like approach to fantasy football probably won’t lead to glory.

Why not? Well, to start, value-focused buy-and-hold investing is all about ignoring short-term market fluctuations and sticking with your investment philosophy over the long-haul. Coca-Cola has a bad quarter? Johnson & Johnson delivered poor earnings-per-share growth? No matter. Value investors often see these rough patches as buying opportunities. And one of the foundational principles of value investing is that no investor can consistently predict exactly when to buy this stock or trade that one. When investors do engage in this perilous behavior, they generally end up losing money.

That ethos, however, falls flat when it comes to fantasy football. For one thing, there is no long-term in fantasy football. The season only lasts 17 weeks, which means you have only 17 chances to maximize your total scoring output. While one or two days of poor returns won’t hurt your portfolio, one or two weeks of fantasy football failure could ruin your season. Most leagues have around 10 teams, and, in order to make the playoffs, you’ll usually need seven wins. So if one of your players isn’t performing well, or hasn’t reached his full potential, you don’t have the time to wait.

In other words, don’t be scared to grab onto a hot player until he cools off. For instance, take another look at Peterson and Rainey. Going into the 2013 season, ESPN ranked Peterson the top fantasy football player to draft. Bobby Rainey is not Adrian Peterson. For his career, Rainey only has 566 rushing yards. Peterson has 10,115.

Nevertheless, Rainey was the superior running back over the last seven weeks of the 2013 NFL season. Using the NFL.com scoring system, Rainey earned 79.3 points from week 11 to 17, while Peterson (due in part to injury) only scored 54.8. Even if you take out Rainey’s career day against the Falcons, the two running backs scored pretty much the same number of points.

This isn’t an isolated example, either. Two weeks earlier, Nick Foles, who began the season as the Philadelphia Eagles second-string quarterback, threw for seven touchdowns and garnered 45.2 points for his fantasy owners. Foles would go on to accumulate a total of almost 260 points for the season (more than superstars Tom Brady, Ben Rothlisberger, and Matt Ryan) despite starting in only 11 of 16 games.

In fact, last season, 15 different players scored the most points in a given week (Peyton Manning and Drew Brees each did it twice). Of those 15 players, not one was listed in the top five on ESPN’s pre-season best fantasy football players list. Brady never scored the most points in any one week, for example, but Bears back-up quarterback Josh McCown did, in week 14.

In short, buying the football equivalent of Coca-Cola shares (one of Buffett’s most beloved and long-held stocks) and hanging on through thick and thin can be a losing game.

I learned this lesson the hard way, having drafted Buffalo Bill running back C.J. Spiller with my first pick last season. Ranked the 7th best player by ESPN going into last season, Spiller scored 3.5, 11.7, 3, and 7.7 over the first four weeks. Unwilling to give up on such a high pick, however, I kept him in my starting lineup for most of the season. I ended up in the bottom of my league and learned a valuable lesson in sunk cost theory.

Of course finding seven weeks of Rainey, or spotting the next Foles off the waiver wire, is difficult. Some up-and-comers are just flashes in the pan and will deliver worse returns than your first-round pick. But when this season’s Foles takes off, don’t be surprised. If you play fantasy football you must learn to embrace the shooting star—and if that star burns out, find another.

MONEY First-Time Dad

10 Things Millennial Parents Want Their Parents to Buy for Them

Luke Tepper
"Buy me things," Luke said to the world.

At least according to this new (and pretty broke) millennial dad.

For one hour, from 6 p.m. to 7 p.m., our house runs as efficiently as a Swiss train.

Here’s how it works: Luke, the Mrs., and I return home after a brisk two-hour walk in Prospect Park. As soon as we uncork Luke from his stroller, my wife starts his bath while I heat his bottle. After the bottle warmer beeps (our lives are governed by beeping machines), I place his dinner beside the feeding chair, collect his bear-themed towel, and together Mrs. Tepper and I extract Luke from the bathtub. We dry him off, fasten a new diaper, and I give Luke the bottle. Five ounces later, Luke, now safely ensconced in his swing/chair/bed, softly cries for ten minutes and slips into blissful unconsciousness. My wife and I praise all that’s sacred and pure and holy and collapse onto the couch.

Weekdays are more difficult (there’s only one of us), and sometimes I’ll make the bottle too hot or cold, and occasionally he’ll sob hard more than he cries soft. Still, most days, most of the time, run smoothly. And after he’s sleeping, after the Mrs. and I have put our feet up, we often look at each other and think the same thing: How the hell did our parents do this?

Not how were our parents capable of caring for us when we were infants, but rather how did they do it without 21st century conveniences? How did they put us to sleep without such miracles of engineering as a sound machine that emits an oscillating bird call.

Modern millennial parents, especially city-bound ones, have battled one economic hardship (high student loans, soaring rents, the freaking Great Recession) after another. Child care has never been more expensive, and we both work 50 hours a week in order to pay for our life.

Boomer parents fortunate enough to have the means to help their kids (and grandchildren) often don’t know how to most efficiently allocate their funds. Well, your eternally grateful millennial children will be over the moon if you bequeath us one (or 10) of these items that could make our lives as parents easier.

Hardware:

1. Upscale Stroller (Cost: $730)

It may seem ridiculous for your grandchild to be chauffeured in a jumble of plastic and rubber that costs about the same as a couple of Bruce Springsteen tickets. But this stroller feels like it can withstand a tornado (or at least the next Sandy) and lets you face the toddler toward you or out into the world.

2. A Mechanical Swing ($140)

This electric-powered swing has five speeds and almost saved our lives. Luke does not fall asleep on his own in his crib, but he will in his swing. Eventually we’ll have to move him to more stationary ground, but that day is not soon.

3. Portable Dishwasher ($219)

We live in Brooklyn, our apartment costs $2,000 a month, and we don’t have a dishwasher. While dishwashing is a personal source of pride, I can’t help but be overwhelmed by the onslaught of bottles and baby milk containers teeming inside our sink every night when I return from work.

4. Video Monitor ($102)

Since we live in a two-bedroom apartment with not terribly thick walls, you may wonder why we need a video monitor. Isn’t this a perfect distillation of helicopter parenting? That’s a reasonable question. But I would point out that we are first-time parents. And so were you. Are you telling me that you never woke up at 4 a.m. worried that kidnappers stole your son or that he somehow fell out of whatever he was sleeping in? At the very least the video monitor gives us a sense of control in a universe of chaos.

5. Portable Crib ($100)

If you want us to visit, then Junior needs a place to sleep.

Services:

6. HBO Go (Free with HBO subscription)

New parents, obviously, can’t go to the movies without hiring someone to watch the little one. Since all of our funds as new parents go toward buying stuff for Luke, there isn’t a lot left over for sitters and movie tickets. So, grandparents, pass along your HBO Go account to your heirs to ease their boredom.

7. More Leg Room (Depends on flight)

Last month Mrs. Tepper and I visited her family in Florida. Flying with a baby is terrifying, but was made better by the fact that my father-in-law purchased an Even More Space seat for our JetBlue flight home. It cost $50 per person, but we were able to board quickly, stretch out our legs, and cut through the security line.

8. Takeout (Depends on meal)

Cooking is time consuming, especially after the enervating experience of putting your baby down for the night. Want to make sure your kid’s family is eating well? Let them mooch dinner off your Seamless account.

9. Baby Yoga (Depends on class)

It is surprisingly difficult to exercise when you’re charged with safeguarding an infant. That quick jog of a couples of miles or bike ride through the park is now close to impossible. One easy solution, though, is baby yoga. There’s a yoga studio around the block from our apartment that offers an hour-long “Baby and Me” yoga class for $11 (or about $10 cheaper than a sitter). (But your parental judgement is free.)

10. Everything else (Depends on your net worth)

Or, well, whatever you can afford. Your child, and her child, really appreciate it.

Taylor Tepper is a reporter at Money. His column on being a new dad, a millennial, and (pretty) broke appears weekly. More First-Time Dad:

MONEY Sports

How the Economics of Playing Football and Basketball Compare

That loud roar you heard this week was NFL training camp getting under way. With less than six weeks until the Green Bay Packers head to Seattle for a game against the Super Bowl Champion Seahawks, fans across the country are following every move of their favorite players and planning for their fantasy football draft.

We decided to take a look at some of the important markers in the life-cycle of a professional athlete. From sporting gear to concussion rates, the gallery below provides a snapshot of what parents have to pay to get their kids on the field—and how long players stay in the big leagues once they actually get there.

To put the numbers in a little bit of context we compared football’s costs to basketball’s.

MONEY First-Time Dad

The One Thing Prince George Won’t Get for His Birthday

Britain's Prince George is seen ahead of his first birthday
At just 1 year old, Britain's Prince George is still too young to know just how different he is from other tykes. John Stillwell—Reuters

Despite limitless funds, castles, and loving parents, Prince George will never own this one thing.

Today Prince George, the first son of Prince William and Kate Middleton, turns 1 year old. By all accounts his first birthday party will be tasteful and reserved for a select group of friends and family. The pomp quotient will be at a minimum.

Of course, when your great grandmother is the Queen of England, your dad is a prince, and you are third in line to become the king, the term “friends and family” takes on new meaning. Likewise, a small get-together at the house is something else altogether when that house is a 20-room apartment.

My son, whom I write about in this space most Mondays, is not the third in line to become the King of England, and isn’t currently the prince of anything. (Don’t tell his mother.) While Luke is only narrowing in on the second half of his first year, it is difficult not to feel a touch of parental inadequacy when you compare yourself to royalty.

For instance, we don’t have $41 million to bestow upon Luke. Nor can the Family Tepper abscond from muggy New York City to New Zealand and Australia for a summer vacation—although we did trek down to St. Petersburg, Fla. Luke will never be named the “World’s Most Eligible Infant,” despite his killer combination of Byronic looks and joie de vivre (at least in this journalist’s unbiased opinion). And that’s because he’s the child of relatively ordinary parents.

Yes, there is a whole stratum of experiences forever beyond Luke’s grasp because he wasn’t born into higher stock.

At the same time, though, there is one thing that we can give Luke that no royals can give their offspring. He will, by and large, live a normal life. And Prince George will not. Which is unfortunate.

With the castles and private jets and rapacious attention of an unrelenting populace comes a responsibility to become a symbol of, well, something. (I’m American and don’t understand the particular psychology of fetishizing kings and queens and princes.) When every move is studied and photographed and judged and written about, I imagine it would be hard to have a childhood.

The other day Luke and I went to the park. We were surrounded by lots of other families, and we took our place in an open spot in the shade. Luke spent the half hour seated upright, pulling up blades of grass and then toppling over. Our dachshund sat nearby, so when Luke was done with the grass he pet our dog for the first time. I took a picture of the scene and sent it to my wife.

That is where the picture stayed (unless, of course, I chose to use it for this column). The only people who will care that Luke has taken his first steps are his family, not the entire English-speaking world.

While we will never be able to give Luke a palace, we can at least give him that.

Taylor Tepper is a reporter at Money. His column on being a new dad, a millennial, and (pretty) broke appears weekly.

More First-Time Dad:

MONEY First-Time Dad

What Millennials Want That Their Boomer Parents Hate

Luke Tepper
Luke looks around for the inflation that has yet to come Taylor Tepper

It is nine letters long, (not legal weed), and causes investors' blood to boil.

Inflation. We really want some inflation. Now, if possible.

Macroeconomic forces are not top of my mind all the time. A couple of weekends ago, for instance, my wife and I played poker and drank beer on our friend’s rooftop patio. Our son Luke, clad in his new miniature gondolier outfit, crawled between our legs as one person after another told us how cute he was. That night Luke held onto one of my fingers while I gave him his midnight feeding. Later my wife and I slipped into his room for a few moments to watch him sleep.

I can tell you that at no point during our perfect summer day did the word inflation pop into our heads. We went to sleep thinking just how lucky we were to have such a beautiful son, rather than dwelling on the fact that we face an inflationary climate that is hostile to the economics of our new family.

We aren’t strangers to what economists call “headwinds.” Mrs. Tepper and I graduated from the same really expensive private college in 2008, just as the nation was mired in the worst recession in 80 years. We attended college (and later graduate school) as state governments across the country drastically cut higher education spending, which meant higher costs, which meant that we incurred a combined six-figures student loan marker. And entering the job market in the teeth of negative economic growth means we’ll be playing catch-up for years and years.

Given all that we (and Americans, generally) have endured since 2008, it might seem strange that I would ask for higher inflation. When the prices of goods rise quickly, the Federal Reserve is apt to raise interest rates. Higher interest rates make it more expensive to purchase a house, or borrow for anything. Don’t I want to own a house? What’s wrong with me?

For a little bit of context, let’s back up and look at where inflation has been over the past six years. If you look at the core price index for personal consumption expenditures (or core PCE), inflation is rising at an annual rate of 1.5%. In fact ever since Lehman Brothers declared bankruptcy it has barely budged over 2%.

inflation...

Even if you look at a broader inflation metric, like the consumer price index, prices have risen at 2.1% or lower for almost two years.

What does this mean?

For one thing, wage growth has stagnated at around 2% since we left school, and job growth, while picking up lately, has been relatively slow. Weak job creation and small pay increases means that people have less money to spend, which means fewer jobs and the cycle goes round and round.

So more economic growth (spurred on by more borrowing and spending) would help alleviate low wage growth, and help us ramp up our weekly paychecks. But it would also do something else. It would help us pay down our student loan debts.

Super low inflation is bad for people who have debt. Right now Americans owe more than $1.1 trillion in student loan debt. That means people our age are receiving raises that aren’t that high and have to confront a record level of debt before their careers really get going. With so much of our take-home pay earmarked for debt service, no wonder housing isn’t a priority, or affordable, for millennials (or the Teppers).

Of course, this kind of talk scares our parents (and rich people), who own bonds and other assets designed to preserve wealth instead of create it. Having already endured years of low interest rates, they really don’t want their bond portfolio to be hit by an inflation jump.

To which I say, tough. Many boomers entered the job market as the economy was expanding and college was affordable. Their children did not.

Luke has this one toy that he loves. It’s a sort-of picture book for infants consisting of a crinkly material, and he loves nothing more than smashing the thing between his hands and feet. In 17 years, he’ll want a car—and then four years of college.

I realize that the costs of these things will rise—prices always rise. It would just be nice if our salaries rose enough to pay for them.

Taylor Tepper is a reporter at Money. His column on being a new dad, a millennial, and (pretty) broke appears weekly. More First-Time Dad:

 

MONEY The Economy

Think the Fed Should Raise Rates Quickly? Ask Sweden How That Worked Out

Raising interest rates brought the Swedish economy toward deflation Ewa Ahlin—Corbis

Some investors are impatient for the Fed to raise interest rates. They may want to be a little more patient after hearing what happened to Sweden.

If you’re a saver, or if bonds make up a sizable portion of your portfolio, chances are you’re not the biggest fan of the Federal Reserve these days.

That’s because ever since the financial crisis, the nation’s central bank has kept short-term interest rates at practically zero, meaning your savings accounts and bonds are yielding next to nothing. The Fed has also added trillions of dollars to its balance sheet by buying up longer-term bonds and other assets in an effort to lower long-term interest rates.

Thanks to some positive economic news — like the recent jobs report — lots of people (investors, not workers) think the Fed has done enough to get the economy on its feet and worry inflation could spike if monetary policy stays “loose,” as Dallas Fed President Richard Fisher recently put it.

If you want to know why the argument Fisher and other inflation hawks are pushing hasn’t carried the day, you may want to look to Sweden.

Like most developed nations, Sweden fell into a recession in the global financial crisis. But unlike its counterparts, it rebounded rather quickly. Or at least, that’s how it looked.

As Neil Irwin wrote in the Washington Post back in 2011, “unlike other countries, (Sweden) is bouncing back. Its 5.5 percent growth rate last year trounces the 2.8 percent expansion in the United States and was stronger than any other developed nation in Europe.”

Even though the Swedish economy showed few signs of inflation and still suffered from relatively high unemployment, central bankers in Stockholm worried that low interest rates over time would lead to a real estate bubble. So board members of the Riksbank, Sweden’s central bank, decided to raise interest rates (from 0.25% to eventually 2%) believing that the threat posed by asset bubbles (housing) inflated by easy money outweighed the negative side effects caused by tightening the spigot in a depressed economy.

What happened? Well…

Per Nobel Prize-winning economist Paul Krugman in the New York Times:

“Swedish unemployment stopped falling soon after the rate hikes began. Deflation took a little longer, but it eventually arrived. The rock star of the recovery has turned itself into Japan.”

And deflation is a particularly nasty sort of business. When deflation hits, the real amount of money that you owe increases since the value of that debt is now larger than it was when you incurred it.

It also takes time to wring deflation out of the economy. Indeed, Swedish prices have floated around 0% for a while now, despite the Riksbank’s inflation goal of 2%. Plus, as former Riksbank board member Lars E. O. Svensson notes, “Lower inflation than anticipated in wage negotiations leads to higher real wages than anticipated. This in turns leads to many people without safe jobs losing their jobs and becoming unemployed.” Svensson, it should be noted, opposed the rate hike.

image (8)
Sweden

Moreover, economic growth has stagnated. After growing so strongly in 2010, Sweden’s gross domestic product began expanding more slowly in recent years and contracted in the first quarter of 2014 by 0.1% thanks in large part to falling exports.

As a result, Sweden reversed policy at the end of 2011 and started to pare its interest rate. The central bank recently cut the so-called “repo” rate by half a percentage point to 0.25%, more than analysts estimated. The hope is that out-and-out deflation will be avoided.

So the next time you’re inclined to ask the heavens why rates in America are still so low, remember Sweden and the scourge of deflation. Ask yourself if you want to take the risk that your debts (think mortgage) will become even more onerous.

MONEY The Economy

A Key Fed Official Says the Job Market is Just Fine. But is He Right?

Richard Fisher, president and CEO of the Federal Reserve Bank of Dallas
Richard Fisher, president of the Federal Reserve Bank of Dallas. Jose Luis Magana—Reuters/Corbis

With a little help from Jonathan Swift, Shakespeare, and World War II, Dallas Fed President Richard Fisher makes the case for why interest rates need to rise soon.

In between references to Shakespeare, beer goggles and Wild Turkey, Dallas Federal Reserve Bank President Richard Fisher— a member of the Federal Open Market Committee that sets the nation’s interest-rate policy— expressed concern Wednesday about the risks caused by the Fed’s ongoing stimulative policies.

Thanks to a dramatically improving jobs picture, according to Fisher, the Fed should not only cut off its bond-purchasing program (known as “QE3″) by October, but the central bank should also shrink its portfolio of assets and begin raising interest rates early next year or sooner.

Whether or not the economy can withstand monetary tightening — fewer jobs means fewer people able to buy stuff — is open for debate. The real question, though, is if the jobs picture is really that strong?

First some context.

In his colorful speech, Fisher, one of the Fed’s leading “inflation hawks,” reiterated his belief that the Fed’s rapidly escalating balance sheet (now at approximately $4.4 trillion) in combination with a near-zero federal funds rate has led to investors having “beer goggles.” (As Fisher explains it, “this phenomenon occurs when alcohol renders alluring what might otherwise appear less clever or attractive.”) This is what he says is happening with stocks and bonds, which are both relatively expensive.

To make his point Fischer quoted Shakespeare’s Portia in Merchant of Venice: “O love be moderate, allay thy ecstasy. In measure rain thy joy. Scant this excess. I feel too much thy blessing. Make it less. For fear I surfeit.”

Portia’s adjectives (joy, ecstasy and excess) describe “the current status of the credit, equity and other trading markets that have felt the blessing of near-zero cost of funds and the abundant rain of money made possible by the Fed and other central banks that have followed in our footsteps,” Fisher said.

Of course, the Federal Reserve hasn’t bought trillions of dollars of debt, and cut the main interest rate to nothing, for no reason. There was something called, you know, the Great Recession — the once-in-a-lifetime cataclysmic economic event from which the country is still recovering.

But, said Fisher, things are improving, especially in the labor market. Not only did businesses add almost 300,000 employees last month, but there are more job openings, workers are quitting more often and wages are rising. Is he right?

Let’s check out some graphs:

Job openings:

ycharts_chart-1

Fisher is right that job openings “are trending sharply higher.” This time last year, there were a little less than 3.9 million job openings. Right now there are more than 4.6 million – an 18% increase.

“Quits”:

quits

The healthier an economy, the higher the number of employees who quit their job to either find another or start a new business. Therefore a higher so-called quits rate, means a healthier labor market.

Like job openings, the number of quits has been rising since bottoming out during the recession. The major difference though is that the number of job openings has almost reached pre-recession levels, while quits has not.

Wages:

wage growth
BLS

Fisher admits that wages aren’t growing “dramatically.” Nevertheless, he cites the Current Population Survey and the most recent National Federation of Independent Business survey to show that wages are on the rise.

However, wage data from the Bureau of Labor Statistics shows that Americans in the private sector are earning $24.45 an hour, only up 1.9% from last year.

But these three metrics aren’t the only metrics to gauge the health of the labor market.

Long-Term Unemployed:

l-t unemployment
BLS

Before the recession, about 1.3 million workers were without a job for longer than 27 weeks. Today, that number is slightly more than 3 million. While that’s significantly better than the post-recession high of 6.8 million in August 2010, there are still a lot of workers who’ve been without a job for a long time.

“Long-term unemployment is still a significant source of slack in the economy and is accounting for a historically large share of the total unemployment rate,” says Wells Fargo Securities economist Sarah House.

Broader unemployment:

l-t2
BLS

And while the unemployment rate may signify the economy is moving closer to full employment, the picture is less sanguine if you look at a broader unemployment rate that takes into account the underemployed (part-time workers who want to work full-time) and discouraged workers. Before the recession that number hovered a little over 8%. It’s now 12.1%. And while it’s trending down, it’s not coming down fast enough. At least according to recent testimony by Federal Reserve Chair Janet Yellen.

Conventional wisdom says inflation will come when wages really start to rise. Some, like Fisher, think we’re getting really close to that point. But if you take into account wage data from the BLS and look at the millions of Americans who aren’t working to their full capacity, it’s not hard to see how tightening monetary policy might make life harder on lots of workers.

MONEY First-Time Dad

What Adam Smith Taught Me About Child Care

Luke Tepper
The mental health of this child's parents depends on their division of labor.

The best parenting book you've haven't read was written by a childless British philosopher who's been dead for 200-odd years.

It’s 1 p.m. on Sunday, and a thick fog of panic begins to set in. Luke has just woken from his mid-morning nap and will need to go back down for a light snooze in three hours. If we miss that window, he’ll become too tired by bedtime and will holler for an extra hour before finally going to sleep for the night; and by the time he does, Mrs. Tepper and I will be hollowed-out shells of our normal selves.

But this afternoon is not an unscheduled pocket of time to be frittered away perambulating around Prospect Park. We have work to do.

Our mission is to retrieve a second-hand high chair (which combines a feeding seat with “a sophisticated pneumatic lift system” according to the ad), stop by the hardware store for air conditioning accessories, and buy groceries for dinner.

That’s just half the battle. Before we even get into our car, we must pack Luke’s diaper bag, collect a few of his favorite teethers and jam his apocalypse-proof $800 stroller into our trunk. This is all while entertaining the tyke so that he doesn’t cry, and detaining our dachshund behind the kitchen gate (which is intended for toddlers, oddly enough). Remember, we are just two normal humans with only four arms.

Here’s the really amazing bit: We got it accomplished. Like, all of it. Luke even passed out right after the clock struck 4 p.m. How? Well, it had a lot to do with Adam Smith.

In his masterpiece The Wealth of Nations, the economist discusses the benefits of division of labor with the example of a pin factory. Instead of each employee making a pin all by himself, each worker does one specific task, and in doing so the factory becomes much more productive.

“One man draws out the wire, another straightens it, a third cuts it, a fourth cuts it, a fifth grinds it at the top for receiving the head…”

Smith goes on to say that this system is efficient even for smaller factories with only 10 employees.

“Each person, therefore, making a tenth part of 48,000 pins, might be considered as making 4,800 pins in a day. But if they had all wrought separately and independently…they certainly could not each of them have made 20, perhaps not one pin in a day…”

Now, raising a child is not like making a pin. (For one thing, you don’t have to change a pin’s dirty diaper.) But splitting up chores, errands and responsibilities is a major reason why we still resemble functioning adults.

This wasn’t always the case. When Luke was first born, Mrs. Tepper naturally took charge. While I was absolutely terrified that one false start on my part would forever limit his boundless potentiality, Luke’s mother stepped up to the plate. She could pack his travel back while holding him in one arm faster than I could unfold his stroller.

She put him down for his nap, picked him up when he awoke and fed him. Even with the bottle, she was simply better at it than me. She was the superstar, and I was the benchwarmer.

Now, five months on, we’re more of a team. I developed my own rhythm with Luke, and now Mrs. Tepper isn’t the only one who can feed, bathe and clothe him.

Before we left that Sunday morning, Mrs. Tepper and I passed Luke between each other like a basketball. She pirouetted, diaper bag in hand, and I slid Luke gracefully into his stroller with three toys dropped onto his lap. It was an efficient, domestic dance that set the tone for a stress-free afternoon of chores.

Thank you, Adam Smith.

__________

Taylor Tepper is a reporter at Money. His column on being a new dad, a millennial, and (pretty) broke appears weekly.

More First-Time Dad:

Why a Maid is a Better Investment than a Divorce Lawyer

Why You Should Get Up From Your Desk and Go Home

Baby Clothes are Cheaper than Therapy

Why I’ll Send my Infant Son to College Before I Buy a House

Why Does my Baby Need Two of Everything?

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