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My nephew's wife is Navajo. I learned about this tradition last night and thought it was very interesting. I also am very glad they are keeping traditions. Their newest daughter has just turned three months old. In March they will be traveling to Phoenix for a combined birthday celebration (for the older one who turns two Feb 20), baptism for her, and laughing party.
"In the Navajo tradition we have what we call Chi Dlo Dil, or a Laughing Party, for a newborn. The Laughing Party is for the first laugh you hear from a child. It’s usually around six weeks. It’s the baby’s first expression to the physical world, saying ‘I’m ready to interact.’
Before that, the baby is still in the soft (spirit) world and you aren’t supposed to put anything hard and fixed on the body, or s/he may take on those qualities. But after the laughing party, you can give the baby jewelry or bracelets or other decorations.
At the party everybody sits around the baby and has a big meal and plays with the baby. The person who makes the baby laugh first plays an important role in the child’s life.” – Nancy Evans, Shiprock, NM (Navajo Nation)
In this case, the wife made the baby laugh first, so she will host the party. Here's a pic of their two adorable girls taken right after the newest was born in Oct. If it's possible, they are even cuter now!