I think in trading firms, you would not be defined as a "software engineer", but rather "quantitative analyst". Often times, quants require other advanced mathematics degrees as well, thus creating a distinction between quant, and software engineer. Also, this article seemed to focus only on tech firms anyway.
Nope, software engineers and quantitative analyst are two different positions. The first one is building an infrastructure (market data feeds listeners, caches,...) for second one (which builds model based on that infrastructure). Been there, seen that...
Good point. And now that I think of it that way, It wouldn't surprise me that the software engineers in finance are not making google money. I guess I thought the parent was surprised because he was thinking quants.
And I forgot to mention that 128K is really a low end for finance software guys. It's not uncommon to see salaries about 200K for experienced guys even outside of Manhattan ;-)