There are plays to be made despite politics

Washington, D.C., is currently in fantasy land. Or maybe that's nightmare land. Either way, the good news for investors is that central banks are here, to the rescue, once again — acting when and where politicians are too incompetent to lead.

Putting all political opinions aside, the government shutdown is, at the very least, an embarrassment, will likely cause some damage to our economy, and will likely force the Federal Reserve to maintain or perhaps increase its monetary stimulus, especially if this drags on. Our politicians failures will likely cause the following market reaction:

Interest rates will likely remain rangebound with a downward bias, at least through the end of the year. Expect the 10-year Treasury yield to end below 2.5% at year end.

The U.S. dollar will likely strengthen against major currencies, as "safe haven" buyers seek refuge from the uncertainty

In spite of added short-term volatility, equities will rally, ending the year at record highs

Investors should tune out the noise and focus on the data, and the data tells us that stocks are likely to continue to rise, in spite of the politically designed uncertainties, markets are benefiting from increasingly positive economic data.

In the U.S., manufacturing activity, auto sales, home prices and even the unemployment rate is improving (albeit with some statistical trickery). In Europe, consumer and business confidence is rising, the unemployment rate has dropped to a multi-year low, and manufacturing and export data continues to improve. Asia's economies, particularly the emerging-market economies in the region, also appear to be recovering from the summer duldroms. Japan's Takan (their version of PMI and ISM Manufacturing report) came in much stronger than expected, and with the recent drop in the Yen, exports are improving as well.

Option and bond markets appear to agree with my thesis — based on price movement, volatility and trading volume, neither are pricing in a downturn in our economy or a meaningful change in trend.

Lastly, and this is truly a two-edged sword, according to the latest report by the Federal Reserve, non-financial companies are sitting on approximately $1.5 trillion in cash, and bank-holding institutions are holding over $2.3 trillion in deposits at the Federal Reserve. As old as the story is, eventually a chunk of this money will re-enter the system.

I think the first step will be an increase in share-buybacks and an increase in dividends. As such, I am once again overweighting large-cap multinationals, including some great European names. My favorites include Novartis (NVS) , Legget and Platt (LEG) and Visa (V) .  Of course, the potential risk is that the cash horde remains and even grows, likely creating a deeper negative interest rate environment — something that surely would be damaging to our economy.

Disclosure: NVS, LEG and V are holding in the MPDAX and separate accounts at GGFS.