Bank of America (NYSE: BAC) reported yesterday that the meltdown in the US subprime real-estate market has led to a global loss of $7.7 trillion in stock-market value since October.

Let me say that again...

7.7 TRILLION dollars! That's 7.7 million million dollars. This value is equivalent to cumulative GDPs of the smallest 171 countries in the world. And it's gone missing from the stock markets!

Bank of America admitted in its report yesterday that the crisis, which has now spread beyond US shores to banks and other sectors worldwide, is "one of the most vicious in financial history".

These losses are worse than anything we've seen in the past few decades including greater than those suffered on Black Monday of 1987 or after 9/11.

An analysis by Bank of America showed that in the most recent episode linked to subprime loans, world market capitalization was down 14.7% three months after a peak in late October. And these are just the beginning of the losses most are expecting.

A report last week by Standard & Poors ratings agency showed global stock markets were walloped with a collective loss of 5.2 trillion dollars in the month of January alone! Meanwhile, the large majority of Americans still seem to have their head up their collective butts.

The financial markets shed $7.7 trillion and people go and continue to blow their money at Wal-Mart (NYSE: WMT).

And now, here's the real kicker...

These losses are from the stock market only. There's no telling what kind of losses we'll finally end up seeing in the housing market. And remember, houses are most people's single largest asset. Imagine if you had 75% of your stock portfolio tied up in one company. Then, that stock lost 50%. You're total portfolio would have shed over a third of its value. That's the kind of real losses to net worth that we'll be seeing. Most will probably be worse.

The fallout from this subprime mess is going to take years to clean-up. Make sure your ducks are in line. Buy gold and other hard assets.

- luke