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It is increasingly likely that Italy (which has been busy bailing out various insolvent banks while pretending it isn't) won't be the first nation to try out Europe's new BRRD "bail-in" insolvency directive. Instead, that honor may go to Spain where the sixth-largest bank, Banco Popular plunged the most in 28 years amid investor concerns that the bad debt-laden bank may have to liquidate as neither a buyer nor a new capital raise appear likely.

Back in 2014, a scandal erupted when media reports confirmed what many had previously speculated about China's banking system: namely that much of China's staggering loan issuance had been built (literally) upon air and that billions (or trillions) in loan collateral had been "rehypothecated" between two, three or many more debtors - or never even existed - forcing banks to accept that they would never recover much if any of the pledged collateral - in most cases various commodities - if the economy were to suffer a hard-landing resulting in mass defaults.

Even as attention has turned once again to Italy as the next possible source of European financial contagion, Spain's sixth largest bank has found itself in freefall over the past few days as concerns grow that the bank may be liquidated unless a last-minute buyer, or source of capital, emerges.

Whereas most bank clients accepted a bail-in as one of the risks associated with depositing cash on a bank account, Italy doesn’t seem to be too sure about forcing its banks to do so.

We all know the never-ending issues related to Banca Monte Dei Paschi, but that bank wasn’t Italy’s only problem. Two smaller banks, Banco Popolare di Vicenza and Vento Banca also need to be rescued. Although these banks are definitely smaller than Monte Paschi, and wouldn’t have a huge impact on the international banking system, it definitely is an issue which has to be solved.

News that Goldman purchased some $2.8 billion in Venezuela bonds issued by state oil company PDVSA and until recently held by Venezuela's central bank - at a 30% discount to market, paying 31 cents on the dollar or around $865 million in notional - quickly set off a firestorm of angry protests, in which Goldman was accused of making money from other people's misery (even though the story of Goldman's involvement in Venezuela's debt is hardly new, as we reported in 2014 in "How Goldman Sachs Became Broke Venezuela's Loan Shark"