Filed pursuant to Rule 433 Registration Statement No. 333-131266
Morgan Stanley Morgan Stanley Fixed Income Investor Overview Full Year 2006

Notice This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. No representation is made that it is accurate or complete. The presentation has been prepared solely for informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since originally presented. The information provided herein may include certain non-GAAP financial measures. The reconciliation of such measures to the comparable GAAP figures are included in the Company's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including any amendments thereto, all of which are available on www.morganstanley. com. This presentation may contain forward -looking statements. You are cautioned not to place undue reliance on forward -looking statements, which speak only as of the date on which they are made, which reflect management's current estimates, projections, expectations or beliefs and which are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of risks and uncertainties that may affect the future results of the Company, please see "Competition" and "Regulation" in Part I, Item 1, "Risk Factors" in Part 1, Item 1A, and "Certain Factors Affecting Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended November 30, 2006 and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in the Company's Quarterly Reports on Form 10-Q and other items throughout the Form 10-K, Forms 10-Q and the Company's Current Reports on Form 8-K. The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-584-6837. Morgan Stanley This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 2

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Consolidated Financial Highlights -- FY 2006 ---------------------- ---------------------- Net Revenues Profit Before Taxes(1) ($MM) ($MM) ---------------------- ---------------------- ---------------------- ---------------------- Cont. Ops. Diluted EPS Cont. Ops. Annualized ROE ($/Share) (%) ---------------------- ---------------------- Source: Company SEC Filings and 4Q06 Financial Supplement Notes: (1) Amounts represent income from continuing operations before losses from unconsolidated investees, income taxes, dividends on preferred securities subject to mandatory redemption and cumulative effect of accounting change, net. Morgan Stanley This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 3

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Segment Contributions -- FY 2006 ------------------------------ --------------------------------------- Net Revenues of $34.1bn(1) Profit Before Taxes of $11.0bn(2)(3) (%) (%) ------------------------------ --------------------------------------- Pre-tax Profit Margin Return on Average Common Equity (4) (%) (%) ------------------------------ --------------------------------------- Source: Company SEC Filings and 4Q06 Financial Supplement Notes: (1) Excluding intersegment eliminations of ($269mm). (2) Excluding intersegment eliminations of $33mm. (3) Income from continuing operations before losses from unconsolidated investees, income taxes and cumulative effect of accounting change, net. (4) The computation of average common equity for each segment is based upon an economic capital model that the Company uses to determine the amount of equity capital needed to support the risk of its business activities and to ensure that the Company remains adequately capitalized. Morgan Stanley This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 4

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Key Strategic Principles and Financial Objectives Diversified, Global Firm Focused on Improving Profit Margins, Growth, and ROE o Leverage global scale, franchise and integration across businesses o Strike a better balance between principal and customer activity o Invest to optimize growth opportunities and achieve best-in-class status in all businesses o Aggressively pursue new opportunities including bolt-on acquisitions o Create cohesive "One-Firm" culture with the right leadership Double 2005 pre-tax profits by 2010 5 percentage points improvement in pre-tax profit margin Morgan Stanley This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 5

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Institutional Securities Critical Initiatives 2007 Focus o Increase principal risk taking o Continue to improve risk-adjusted trading revenues and returns on o Expand derivatives business risk taking o Increase presence in domestic and global o Accelerate progress toward our goal residential mortgage of $2.5bn in principal investments o Build leveraged finance business o Build upon growth initiatives in equity derivatives o Grow in emerging markets o Complete integration of o Enhance financing / prime brokerage offerings acquisitions - Mortgages: Saxon Capital (U.S.), o Improve economics of core equities business Advantage (U.K.) and CityMortgage (Russia) - Commodities: TransMontaigne and Heidmar o Pursue measured leveraged finance build out o Build out emerging markets - Develop more international presence through increased local branches - Secure licenses and mandates to increase product offerings in local markets - Focus research on emerging and developing markets o Prime Brokerage - Continue roll out of multi-asset class offerings - Maintain pace of global client balance growth o Enhance electronic and program equity trading capabilities and productivity and efficiency in the cash equities business Morgan Stanley This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 6

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Asset Management Critical Initiatives 2007 Focus o Enhance bench of talent o Continue to grow alternatives and hedge o Build alternatives capability fund opportunities o New products and bolt-on acquisitions / lift-outs - Develop global alternatives sales force, o Rebuild institutional reputation and business, including distribution with Global Wealth particularly in U.S. Management Group o Stem outflows of Morgan Stanley retail mutual - Coordinate structured products/portable funds alpha with Institutional Securities o Continued focus on improved performance - Further develop support functions: legal, operations, trading and risk oversight o Make traditional acquisitions / lift-outs to fill product gaps to complement existing product lines - Equity and fixed income, with large cap products (core, growth and value), global blend, international and high yield o Continue growth of international franchise o Rationalize proprietary fund sales o Continue build out of Private Equity and Infrastructure businesses Morgan Stanley This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 7

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Global Wealth Management Critical Initiatives 2007 Focus o Improve financial performance o Continue recruiting at a measured pace, with only economic deals o Stabilize sales force and energize organization - Confident that FA headcount will finish the year at 8,000 o Explore new revenue opportunities 0 Focus on growth in High Net Worth business o Strengthen linkages with rest of Morgan Stanley franchise - PWM, both domestically and internationally o Develop technology and operations support - Swiss Bank build out o Continued focus on control and compliance/ legal issues o Targeted acquisitions possible o Grow in asset management versus transactional business o Continue growth in the Bank Deposit Program o Expand into alternative investments and offer more closed-end funds o Enhance integration with Institutional Securities o Technology, operations and compliance improvements Morgan Stanley This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 8

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Discover Morgan Stanley This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. Critical Initiatives 2007 Focus ------------------------------------------------- ------------------------------------------------------ o Invest to expand merchant acceptance, new o Complete spin-off by 3Q07 accounts and usage o Grow U.S. Sales and Loans - Merchant acquisition effort - Leverage brand, new products, and service to - Cardmember acquisition and usage continue sales and loan growth - Brand / product differentiation o Universal Domestic Acceptance - Portfolio management - Increase acceptance with small/medium - Additional markets / products merchants by implementing newly-signed o Monetize growth opportunities in the payments acquirer deals business (signature and PIN) o Payments o Grow international network, issuing and acquiring - Add additional third party issuers and volume businesses onto Pulse and Discover Networks o European - Multiple projects to control U.K. credit losses, improve revenue margins and reduce expenses o Expense Efficiency - Cross functional programs focused on improving marketing effectiveness, reducing customer servicing costs and enhancing leverage of employee and infrastructure costs Morgan Stanley This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 9

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Capital and Risk Management o Active capital management - Balance use of capital for organic growth, acquisitions and share repurchases - Current goal to repurchase up to $6 billion over the next 12-18 months - Use Tier 1 capital for economic capital model to give credit to preferred and hybrid capital instruments o Effective risk management - Focus on making sure the Firm's risk-taking is active, prudent, balanced and commensurate with the rewards and the Firm's risk appetite - Use integrated approach that spans all of the risks to which the firm is exposed - the "Doctrine of No Surprises" - Risk committees - at both Firm and business level - regularly perform comprehensive reviews - Control groups (e.g., market risk managers, credit officers and infrastructure) have credibility and access to senior management o Rely on metrics including VaR, stress tests, scenario analysis, mark to market and mark to model back testing Morgan Stanley This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 10

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Increased Economic Capital Usage -------------------------------------------------------------------------------- Average Economic Capital(1) ($Bn) Source: Company SEC Filings and 4Q06 Financial Supplement Notes: (1) The Company uses an economic capital model to determine the amount of equity capital needed to support the risk of its business activities to ensure that the Company remains adequately capitalized. Economic capital is defined as the amount of capital needed to run the business through the business cycle and satisfy the requirements of regulators, rating agencies and the market. The Company's methodology is based on a going concern approach that assigns economic capital to each segment based on regulatory capital usage plus additional capital for stress losses, goodwill and principal investment risk. The economic capital model and allocation methodology may be enhanced over time in response to changes in the business and regulatory environment. Morgan Stanley This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 11

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Better Leverage Firm Capital ------------------------------------- ---------------------------------------------------- Adjusted Assets Lending and Commitments vs. Hedges ($Bn) ($Bn) ------------------------------------ ---------------------------------------------------- Adjusted Leverage Ratio(1): % Investment Grade: 14.2x 16.4x 17.7x 91% 65% 65% ----------------------------------- ---------------------------------------------------- Investment Grade (left axis) Hedges (2) (right axis) Non-Investment Grade (left axis) ----------------------------------- ---------------------------------------------------- Source: Company SEC Filings and 4Q06 Financial Supplement Notes: (1) Adjusted leverage ratio equals adjusted total assets divided by tangible shareholders' equity. (2) Includes both internal and external hedges utilized by the lending business. Morgan Stanley This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 12

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Measured VaR Growth Aggregate Average Trading and Total VaR vs. Total Average Economic Capital(1) 64 67 61 54 33.7 27.8 4Q04 4Q06 % Trading VaR to Economic Capital 0.194% 0.181% % Total VaR to Economic Capital 0.230% 0.199% Compound Annual Growth Rates (%) 2 10 6 4Q04 - 4Q06 Aggregate Average Trading VaR ($MM) Aggregate Average Total VaR ($MM) Total Economic Capital ($Bn) Source: Company SEC Filings and 4Q06 Financial Supplement Notes:(1) The Company uses an economic capital model to determine the amount of equity capital needed to support the risk of its business activities to ensure that the Company remains adequately capitalized. Economic capital is defined as the amount of capital needed to run the business through the business cycle and satisfy the requirements of regulators, rating agencies and the market. The Company's methodology is based on a going concern approach that assigns economic capital to each segment based on regulatory capital usage plus additional capital for stress losses, goodwill and principal investment risk. The economic capital model and allocation methodology may be enhanced over time in response to changes in the business and regulatory environment. This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 13

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Improving Risk / Return Quarterly Sales and Trading Net Revenues vs. Average Trading VaR 0 20 40 60 80 100 120 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Return on VaR (Sales & Trading Revenues / Trading VaR) (x) (left axis) Total Sales & Trading Revenues ($MM) (right axis) Daily 95%, One Day, Average Aggregate Trading Value-at-Risk ($MM) (left axis) $MM / x $MM Source: Company SEC filings and 4Q06 Financial Supplement This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 14

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Financial Strength Total Capital at November 30, 2006 ($Bn) 61.6 65.9 82.8 110.8 125.9 35.4 29.2 28.2 24.9 21.9 20.7 40.9 44.0 57.9 82.6 96.7 126.7 162.1 2001 2002 2003 2004 2005 2006 Shareholders' Equity Long-Term Debt (1) Source: Company SEC filings Notes:(1) These amounts exclude the current portion of long-term borrowings and include Capital Units and junior subordinated debt issued to capital trusts. This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 15

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Liquidity Management Framework Contingency Liquidity Cash Capital Funding Plan Reserve Policy Financing Guidelines o Secured Funding o Surplus Capacity o Asset / Liability Matching o Diversification o Staggered Maturities o Committed Credit Source: Company SEC filings This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 16

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Committed Credit Facility Currency Diversification Unsecured vs. Secured 28% 100% 66% Unsecured 6% $11.43Bn Yen (Y)80Bn ($680MM) USD $7.5Bn Multicurrency $3.25Bn Total Committed Credit = $11.43Bn Source: Company SEC filings This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 17

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

Credit Quality Debt Ratings Senior Debt Commercial Paper Dominion Bond Rating Service Limited AA (low) R-1 (middle) Fitch Ratings (1) AA- F1+ Moody's Investors Service Aa3 P-1 Rating and Investment Information, Inc. (R&I) AA a-1+ Standard & Poor's (2) A+ A-1 Notes: (1) Outlook changed to Negative on December 19, 2006 (2) Outlook changed to Positive on October 27, 2006 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information. 18

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, nonpublic information.

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