julie: i had an interesting conversation with brian reynolds, strategist at can accord.lked not only about the national tax picture, for the local tax picture in the implications of rate rising local taxes for the corporate market. brian reynolds: state and local taxes went up by about $100 billion this year just for pension allocation votes. that means they didn't get 7.5% annual returns on that money. they put it into very aggressive credit funds. they put cash in the corporate balance sheet and ceo's push up their stock prices through buybacks. julie: this is an interesting concept to me that with these rising taxes at the local level the tax revenue will underpin some demand for corporate bonds. is that a phenomenon you have seen and will that continue to be a trend? julien: it could be in a critical source of demand. we think demand for high-grade corporate bonds domiciled in the u.s. will be continuing to be robust. 20 look at our yields relative to some of the other major developed markets, certainly versus core european rates and relative to when you can get in a

here to find this, brian reynolds. think you so much for joining us. -- thank you so much for joining us. explain to us what is happening on the local level and the ripple effect we're going to see? brian reynolds: it is a daisy chain of social engineering. they did not raise texans -- taxes to account for pensions they promised workers. state and local taxes went up by $100 billion this year just for pension allocation. that means they need to get 7.5% annual returns of that money. they put it into aggressive credit funds. those funds by corporate bonds, put cash on corporate balance sheets, and ceos use that to push stocks up-- through buybacks. joe: i love how the cycle you describe and how higher taxes arguably leads to higher equity prices. i've never heard it quite like that. is there any change to this story coming, or is this driver going to continue? brian: that has been the main engine of this credit-led bull market over the last 8, 9 years now, and it is going to change in the sense that it is going to inten