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Income inequality has been growing in America for decades.

As the country's richest get even richer and the share of people below the poverty line increases, America's middle class has been gradually disappearing.

One of the most striking ways to view that income gap is to look at how much money it takes to be in the top 1% of income earners in your 30s.

The age group is roughly a decade into their careers, and any gap that might have existed right after college has had many years to expand.

Consider this chart, which shows the rapid rise.

To create the chart, Business Insider analyzed data from the 2015 American Community Survey, an annual survey by the US Census Bureau that interviews about 1% of all US households about various economic, demographic, social, and housing characteristics.

The resulting breakdown shows that median incomes grow by just $10,000 (or 25%) between 30- and 39-year-olds, while top-1% income jumps from $173,000 to $419,000 over the same age range. That's a 142% increase.

The increases among people in their 30s are much greater than people in their mid- to late-20s. Someone who's 25 needs an income of $116,000 to be in the top 1%. A 29-year-old needs to make $160,000.

This approach has its limits. Surveys like the ACS don't capture everyone at the top, like celebrities and financiers, and some researchers prefer to use alternate forms of data, such as tax records, when studying those at the top of the income and wealth distributions.

What it can do is offer a window into the compounding effects of wealth. Having more disposable income enables people to save and invest more than if they have significantly less. As a result, the rich tend to get richer while people toward the middle tend to survive on their salaries alone.

SEE ALSO: There's a huge difference between being rich at 25 and 35 — and it puts income inequality in stark relief

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More often than not, you're likely to find David Solomon at Goldman Sach's headquarters in Tribeca, helping run the most prestigious white-collar investment bank on Wall Street, where the COO has been a partner since 1999. 

But you might also spy him at The Whales, an Asian-fusion night spot on New York's bustling Lower East Side, donning a T-shirt and a white pair of headphones.

Or, Beautique in Midtown — dubbed a "millionaire playpen" by the New York Post.

But Solomon isn't so much playing with fellow millionaires as he is playing for them — and countless others as well.  

The investment banking stalwart has of late been moonlighting as a DJ on the Electronic Dance Music scene, sharing the stage with stars like Paul Oakenfold and, last month, even spinning vinyl at Willow Studios in Los Angeles for the Electronic Music Awards.

It's an unorthodox hobby for a high-powered finance exec, a breed that more commonly spends its free time hitting the golf links, curating art, cavorting at charity galas, or jetting off to tony weekend homes in the Hamptons or Martha's Vineyard. 

But Solomon has been an audiophile his whole life, as he recently explained in an episode of the podcast "Exchanges at Goldman Sachs." 

"I always loved music," Solomon said. "I was a very analog guy, when I was in college, I must have had over 1,000 LPs, vinyl albums."

A lot has changed since Solomon's college days in the early 1980s. The digitization of music over the past 15 years has facilitated easy access to artists and genres that might previously have remained muted or cordoned off to outsiders.

"I think this year I just saw a statistic that 63 percent of all music is being consumed in a streaming form now," Solomon said. "The ability to kind of curate, study, listen to, try different things, expand your horizons, it just went up exponentially. "

That's how you get a guy like Solomon, age 55 and ensconced in the world of high finance, manning the turntables at beach parties in the Bahamas overrun with bikini-clad millennials. 

He appears to have been reeled in as much by the business angle and the platforms commanded by top DJs as the sound itself. 

Here's Solomon:  

"And so as that happened I started getting more and more interested in different kinds of music. Music I really didn't have a lot of experience with. And five, seven years ago, I started really kind of taking note of club and EDM music and what was happening with all the electronic music, and I said: This is really interesting. Big business. And started looking at it, and I said: You know, I like some of this music. And started playing around with it, started reading about these DJs that really had these incredible platforms, and I said: You know what? This looks interesting. And kind of stumbled into it as a hobby, and now I just do it for fun."

He indulges his side hobby about once a month. 

The Wall Street veteran says finding and exploring a passion is crucial to longevity in a career known for grinding people down and burning them out. 

"If you can't find a way to have passions and pursue those passions and mix them into your professional life and your personal life in some way, shape or form, it's just harder to have the energy to keep on doing this, and to keep moving forward professionally," Solomon said. 

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New homes being built in the US are getting smaller. 

This isn't just about demand for McMansions, the extravagant suburban houses that some buyers are passing over for more practical and modern homes. Rather, it shows that builders are cutting down to provide homes that are both profitable and affordable amid a shortage of inventory, said Matthew Pointon, a property economist at Capital Economics. 

The average size of new single-family homes sold in the US peaked in 2015 at 2,520 square feet, Pointon said. Land availability is also responsible; the median lot size for new homes sold last year fell to 8,428 sq. ft., the lowest in 39 years.

Less available land, higher construction costs and higher wages for builders all add up to more prudent building and higher costs for developers.   

"Unfortunately, and in contrast to what happened in the past, that may mean the recent dip in home size
will not be accompanied by a drop in median real new home prices," Pointon said in a note Friday.

So, what to do in the meantime? Pointon suggested that first-time buyers look further away from urban centers, where there's more land available. 

Hurricanes make things worse

Developers have long cited worker and land shortages as part of the reason why, regardless of size, there's a shortage of affordable housing. Also, it's more profitable to build luxury housing in large cities where demand is strong. 

The devastating hurricanes that slammed the southeastern part of the country last month could escalate the existing challenges, at a time of inadequate housing supply.

The National Association of Homebuilders, a trade organization, said the recent hurricanes intensified its members' concerns about land availability and building-material costs. In September, it reported a decline in member confidence, adding that it expected them to be more optimistic about the market once the rebuilding process starts. "The health of the 2018 housing market will hinge on growth in construction employment," said Nela Richardson, Redfin's chief economist, after the September jobs report showed a 1% year-over-year drop in the industry. The brokerage firm's inventory tracker has recorded 23 straight months of declines. 

"Efforts to rebuild after Hurricanes Irma and Harvey will divert labor resources that are sorely needed to increase the supply of  homes for sale," Richardson said. "The housing market has never had to rebuild so extensively with inventory this tight before."

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Billionaire investor Warren Buffett made a lot of people feel better about historically stretched stock prices earlier this month.

Speaking in an interview with CNBC on October 3, the chairman and CEO of Berkshire Hathaway said, "Valuations make sense with interest rates where they are."

The investment community breathed a sigh of relief. After all, Buffett is arguably the most successful stock investor in world history. An all-clear from him surely gives a green light for adding more equity exposure, right?

Wrong, says John Hussman, the president of the Hussman Investment Trust and a former economics professor.

In his mind, Buffett only gets half of the equation right. While Hussman acknowledges that low lending rates do, by nature, improve future cash flows, he argues that they must also be accompanied by strong growth — something that he notes the US is not currently enjoying.

To Hussman, the simple idea that "lower interest rates justify higher valuations" is one that gives people false confidence.

"It's an incomplete sentence," Hussman wrote in a recent blog post. "Unfortunately, the convenience of investing-by-slogan, rather than carefully thinking about finance and examining evidence, is currently leading investors into what is likely to be one of the worst disasters in the history of the U.S. stock market."

Hussman calculates that stock valuations are stretched 175% above their historic norms, and predicts the S&P 500 will see negative total returns over the next 10 to 12 years. Along the way, the benchmark index will experience an interim loss of more than 60%, he estimates.

As touched on above, at the core of Hussman's bearish argument is a lack of economic growth. He specifically points to slowing expansion in the US labor force, as shown by this chart:

"Put simply, if interest rates are low because growth rates are also low, no valuation premium is 'justified,'" Hussman wrote. "The long-term rate of return on the security will be low anyway without any valuation premium at all. This observation has enormous implications for current U.S. stock market prospects."

So where does that leave the market at this very moment? In the very near term, Hussman's neutral, citing the continued speculative impulses of investors. Still, he stresses that traders should be hedging and using other safety nets to protect against potential downside, which he says could materialize quickly.

To say he's less than warm and fuzzy about the stock market is an understatement. And when discussing price levels, he doesn't exactly pull any punches, saying US equities are now "at the most offensive level of overvaluation in history" — even worse than in 1929 and 2000.

We leave you with the chart supporting Hussman's bearish claims, which shows the margin-adjusted price-earnings ratio for the US stock market at a record high:

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LONDON — Goldman Sachs has circulated a fascinating but scary research note to clients suggesting that the probability of stocks entering a bear market in the next 24 months currently stands at about 88%, based on the history of previous bear markets.

The note is titled "Bear Necessities. Should we worry now?" It is an exhaustive, 87-page dive through macroeconomic data and stock market activity going all the way back to the early 20th Century. It was written in September by London-based Chief Global Equity Strategist Peter Oppenheimer, and European strategists Sharon Bell and Lilia Iehle Peytavin. Most of their data focus on the US S&P 500 index of stocks - the largest and most-followed of the share indices globally.

Here is the historic context. The S&P is currently the second largest and longest bull run in history.

The index is also relatively expensive, the Goldman trio says. The aggregate valuation of the S&P 500 is now in its 88th percentile, as measured since 1976, according to Goldman's calculations. The median stock is in the 99th percentile.

The trio calculated a risk index based on the Shiller price-earnings ratio (the price of S&P 500 stocks divided by the average of 10 years of earnings, adjusted for inflation), the US ISM manufacturing index, unemployment (very low), the bond yield curve, and core inflation.

The resultant "GS Bear Market Indicator" is currently flashing at 67%. The indicator typically hits highs right before a bear market in US stocks appears:

Historically, when the indicator is at 67%, there is an 88% chance of stocks falling into a bear market in two years' time, the Goldman analysts say:

However, the chance of a bear growling into view in the near-term remains low — just 35%.

Bear markets are triggered in three different ways, Oppenheimer et al argue:

• "Cyclical" bear markets are trigged by rising interest rates and recessions;
• "Event-driven" bears come from negative economic shocks like war or emerging market crises;
• "Structural" bears come from financial bubbles.

Depending on your point of view, all three of those triggers are hovering on the horizon: The Fed and the Bank of England are both signalling interest rates will rise; US President Trump is threatening military action in North Korea; and plenty of people think the low-interest rate environment of the last 10 years has inflated asset bubbles in stocks, real estate and property in Europe, and private equity tech startup valuations.

However, Oppenheimer also believes that a bear market is currently being held back by low inflation, which in turn will force central banks to keep interest rates very low. "Rising inflation remains elusive," he wrote in a recent column for the Financial Times. "Market prices continue to reflect a low risk that interest rates will increase enough to trigger a recession in the near future."

If a bear market does happen it will be a roller coaster ride. Goldman created this diagram based on an average of historic data. Typical bear markets feature a false "bounce," in which stocks decline suddenly but then recover, reassuring investors (who then get crushed in the months afterwards) or giving clever investors a second chance to get the heck out of stocks.

Buckle up!

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LONDON — Bitcoin transactions use so much energy that the electricity used for a single trade could power a home for almost a whole month, according to a paper from Dutch bank ING.

Bitcoin trades use a lot of electricity as a means to make verifying trades expensive, therefore making fraudulent transactions costly and deterring those who would seek to misuse the currency.

"By making sure that verifying transactions is a costly business, the integrity of the network can be preserved as long as benevolent nodes control a majority of computing power," wrote ING senior economist Teunis Brosens.

"Together, they will dominate the verification (mining) process. To make the verification (mining) costly, the verification algorithm requires a lot of processing power and thus electricity."

Comparing the amount of energy used for a bitcoin transaction to running his home in the Netherlands, Brosens says: "This number needs some context. 200kWh is enough to run over 200 washing cycles. In fact, it's enough to run my entire home over four weeks, which consumes about 45 kWh per week costing €39 of electricity (at current Dutch consumer prices)."

Not only does Bitcoin use a vast amount of electricity to complete transactions, it uses an almost exponentially larger amount than more traditional forms of electronic payment.

"Bitcoin's energy costs stand in stark contrast to payment systems that have the luxury of working with trusted counterparties. E.g. Visa takes about 0.01kWh (10Wh) per transaction which is 20000 times less energy," Brosens notes, pointing to the chart below:

This week, bitcoin saw its value increase by almost $1,500 per coin with a rally that coincides with renewed interest in the currency from investment banks. The Wall Street Journal last week reported that Goldman Sachs was looking at setting up a bitcoin trading operation, and Morgan Stanley CEO James Gorman said recently that the cryptocurrency was "certainly more than just a fad."

Also this week, a team of analysts led by Gautam Chhugani and Gaurav Jangale from the research house Bernstein said that bitcoin was still just a "censorship-resistant asset class," out of the reach of state control and yet to form a part of the system of settlement and credit that defines money.

"Fiat money is still the final form of settlement — governments still collect taxes in fiat money and salaries are still paid in fiat money," the team said in a note to clients on Wednesday.

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