Investors have been betting on a default since 2008

Speculation about a Greek default started long before the markets found out that the country?s budget deficit was in double digits as a percentage of gross domestic product, since official data show that investors had been gambling on it from as early as two years ago.

According to DDTC, the official database of the International Swaps and Derivatives Association, the average amount of money staked on a daily basis on Greek credit default swaps (CDS) stood at $450 million from June 2009 to March 2010.

That was long before Athens admitted its deficit was spiraling out of control and discussed the country?s debt with its European Union peers in view of a bailout.

Investors clearly realized at the time that Greece was not shielded at all from the global credit crisis, and was particularly vulnerable to contagion from a recession in the United States, which became certain in early 2008. That was precisely the time when the price of Greek CDS started climbing to 80-90 basis points.

In September 2008 the prestigious CEPS think tank in Brussels spoke for the first time about the possibility of a Greek exit from the eurozone, sending the CDS 200 bps higher. Now, of course, their price has soared to 1,369 bps (on May 9, 2011), doubling within less than six months.