Free Writing Prospectus

Registration Statement No. 333-131266

Dated August 15, 2008

Filed pursuant to Rule 433

Morgan Stanley Morgan Stanley Financial Overview Second Quarter 2008

NOTICE 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 "Forward-Looking Statements" immediately preceding Part I, Item I, "Competition" and "Regulation" in Part I, Item 1, "Risk Factors" in Part 1, Item 1A, "Legal Proceedings" in Part I, Item 3, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 and "Quantitative and Qualitative Disclosures About Market Risk" in Part II, Item 7A of the Company's Annual Report on Form 1O-K for the fiscal year ended November 30, 2007 and other items throughout the Company's Form 10-K, the Company's Quarterly Reports on Form 10.0 and the Company's 2008 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 global website 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, non-public information. The presentation has not been updated since it was originally presented. 2

INDEX o Market Environment o Financial Results o Institutional Securities o Global Wealth Management o Asset Management o Risk Management o Capital, Liquidity and Funding 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, non-public information. The presentation has not been updated since it was originally presented. 3

MARKET ENVIRONMENT Pre-Crisis Credit Crisis Resolution o High leverage o De-leveraging o Recognize losses o Securitization growth o Lack of liquidity o Raise capital o Expansion of derivatives o Asset price deterioration o Extend loans o o Capital constrained o Asset dispositions Insurance by monolines o Asset downgrades o Leverage equilibrium 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, non-public information. The presentation has not been updated since it was originally presented. 4

CONSOLIDATED FINANCIAL HIGHLIGHTS 2Q08 Highlights Net Revenues ($Bn) 6.5 ------------------------------------------------------------------------ PBT ($Bn) 1.4 ------------------------------------------------------------------------ Diluted EPS ($) 0.95 ------------------------------------------------------------------------ Pre-Tax Margin (%) 22 ------------------------------------------------------------------------ ROE - Annualized Cant. Ops. (%) 12.3 ------------------------------------------------------------------------ Adjusted Leverage Ratio (x) 14.1 ------------------------------------------------------------------------ Book Value per Share ($) 30.11 ------------------------------------------------------------------------ Average Total Liquidity ($Bn) 135 ------------------------------------------------------------------------ Net Revenue Composition - 6 months 2008 Asset Management 7% Equity 37% Fixed Income(2) 11% Investment Banking 12% Other Institutiona Securities (1) 6% Global Wealth Management(1) 27% Source: Morgan Stanley SEC Filings and Earnings Conference Call (1) The quarter ended May 31,2008 includes a pre-tax gain of $744 million related to the secondary offering of MSC1Inc. (reported in Other Institutional Securities), and a pre-tax gain of $748 million on the sale of the Spanish wealth management business, Morgan Stanley Wealth Management SV" S.A.U. (reported in the Global Wealth Management Group). (2) Represents combined revenues from Fixed Income Sales and Trading and Other Sales and Trading 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, non-public information. The presentation has not been updated since it was originally presented. 5

REGIONAL NET REVENUE GROWTH Americas (1) ($Bn) 13.4 15.4 18.8 12.2 7.3 3.5 2Q08 3.8 1Q08 2004(2) 2005 2006 2007 1H08 % Total 66 65 63 43 49 o Americas net revenues grew 40% between 2004 and 2006 - Excluding the mortgage related loss, 2007 net revenues grew 10% from Europe, Middle East and Africa ($Bn) 5.0 5.7 7.8 10.0 5.3 2.1 2Q08 3.2 1Q08 2004 2005 2006 2007 1H08 % Total 24 24 26 36 36 o EMEA net revenues were $10 billion in 2007, 2x larger than 2004 Asia ($Bn) 1.9 2.4 3.3 5.9 2.2 0.9 2Q08 1.3 1Q08 2004 2005 2006 2007 1H08 % Total 10 11 11 21 15 o Asia net revenues were almost $6 billion in 2007, 3x larger than 2004 and roughly 2x larger than 2006 Source: Morgan Stanley SEC Filings and Earnings Conference Call (1)Indudes U.S., Canada. Latin America and Other. (2)2004 indudes (S1.35 billion) of Eliminations and SO.52 billion of Other. 6 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, non-public information. The presentation has not been updated since it was originally presented. 6

BUSINESS OVERVIEW - STRATEGIC PRIORITIES Institutional Securities Global :Wealth;Management Asset Management o Refocusing the business o Accelerating growth o Redefining the business o Disciplined operating o Weak competitive landscape o Taking action for growth approach o Growing flows and - Leverage Alternatives o Market share opportunities Financial Advisors - Enhance product offering o Investing strategically o Low capital usage - Commodities - Investing in Non-U.S. - Emerging Markets markets - Prime Brokerage - Building Private Equity and Infrastructure product platforms 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, non-public information. The presentation has not been updated since it was originally presented. 7

INSTITUTIONAL SECURITIES ---------------------------------------------------------------------------------------------------- Net Revenue ($MM) 21,110 1,598 4,228 16,149 15,497 2,545 947 12,993 400 3,394 6,281 5,538 2,959 4,810 4,067 6,213 9,003 9,040 980 99 3,625 3,467 5,567 6,346 752 1,667 875 (974) (105) 2004 2005 2006 2007 1Q08 2Q08 Fixed Income(1) Equity Investment Banking Other Inst. Securities(2) ---------------------------------------------------------------------------------------------------- Source: Morgan Stanley SEC Filings and Earnings Conference Call (1) Represents combined revenues from Fixed Income Sales and Trading and Other Sales and Trading. Other Sales and Trading primarily indudes net losses from marko to..marketloans and closed and pipeline commitments. results related 10 Investment Banking and other activities. Prior to 2005. exdudes net revenues associated with corporate lending activities and certain other adjustments. (2) 2008 indudes a pre-tax gain of $744 million related 10 the secondary offering of MSCllnc. 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, non-public information. The presentation has not been updated since it was originally presented. 8

INSTITUTIONAL SECURITIES - POSITIONED FOR GROWTH Investments o Continue to aggressively grow in emerging markets o Build upon growth initiatives in equity derivatives o Continue global expansion of prime brokerage o Opportunistically build out commodities business o Technology to enhance capital allocation and evaluation of trading opportunities Opportunities o Reallocate capital and human resources to areas of growth o Help clients restructure risk positions o Take advantage of trading opportunities created by market dislocations o Provide solutions to clients'asset / liability mismatch challenges o Maximize the Firm'srelationship network 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, non-public information. The presentation has not been updated since it was originally presented. 9

GROWTH STAGES Stage One Restructure then stabilize Increase flows Global Wealth Improve Financial Advisory productivity Management Product investments ------------------------------------------------------------------------ Build Alternatives foundation Seed new products Asset Management Re-enter Private Equity Build out Infrastructure Stage Two Improve margins Organic growth Global Wealth Expand internationally Management Enhance technology / operations ------------------------------------------------------------------------ Continue to attract talent Generate flows Asset Management Restructure Core Asset Management Leverage Alternatives strong performance Stage Three o Growth through acquisition Global Wealth o Competitive PBT margin Management ------------------------------------------------------------------------ o Competitive fund flows Asset Management o Competitive PBT 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, non-public information. The presentation has not been updated since it was originally presented. 10

GLOBAL WEALTH MANAGEMENT ---------------------------------------------------------------------------------------------------- Net Revenue ($MM) 6,625 5,512 710 4,663 5,047 485 627 251 318 788 515 469 558 402 463 1,433 1,299 1,196 1,168 2,436 236 207 2,196 2,601 2,757 3,067 1,606 953 363 346 716 694 2004 2005 2006 2007 1Q08 2Q08(2) Fees Commissions Other(1) Principal Transactions Net Interest and Dividends Source: Morgan Stanley SEC Filings and Earnings Conference Call (1) "Other" includes Investment Banking and Other revenues. 2008 includes a pre-tax gain of $748 million on the sale of the Spanish wealth management business. (2) Morgan Stanley Wealth Management S.V., S.A.U. 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, non-public information. The presentation has not been updated since it was originally presented. 11

ASSET MANAGEMENT Net Revenue ($MM) 5,493 324 1 6415 3,219 3,453 2,933 224 210 135 533 669 415 3,524 2,383 2,462 2,574 543 488 78 26 845 779 (380) (317) 2004 2005 2006 2007 1Q08 2Q08 Asset Management Fees Principal Transactions Other (1) Source: Morgan Stanley SEC Filings and Earnings Conference Call (1)"Other" indudes Investment Banking, Net Interest and Dividends, Commissions and Other revenues. 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, non-public information. The presentation has not been updated since it was originally presented. 12

ASSET MANAGEMENT - REVENUES ---------------------------------------------------------------------------------------------------- Asset Management Net Revenues - 6 months 2008 vs. 6 months 2007 ($MM) 2,877 (1,525) .. 1,031 (292) (36) (36) (3) 34 12 1H07 Principal Principal Net Int/Div Investment Commissions Other Mgt. Dist and 1h08 Investments Trading(1) Banking Admin Fees Source: Morgan Stanley SEC Filings and Earnings Conference Call (1)Includes SIV losses. 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, non-public information. The presentation has not been updated since it was originally presented. 13

RISK MANAGEMENT o Resources - Continued investment in people and technology o Limit Structures / Risk Taking - Scale risk taking based on ability to analyze. monitor and change - Importance of risk correlations and risk concentrations o Modeling - Enhanced focus on stress testing and measuring tail risk - Consistent applications across product categories o Collaboration - Continued integration and constant communication among independent risk control groups: - Market Risk - Credit Risk - Operational Risk - Financial Control - Treasury - Legal and Compliance 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, non-public information. The presentation has not been updated since it was originally presented. 14

RISK MANAGING NET EXPOSURES Total Net Exposure (1) Non-Investment Grade Corporate Lending Commitments ($Bn) ($Bn) 36.2 43.2 26.0 11.6 13.9 35.0 22.3 10.4 8.7 6.4 15.9 1.8 12.7 0.3 ABS CDOI CMBS Other Mortgage- 3Q07 1Q08 2Q08 Subprime Related 3007 1Q08 2Q08 LAF Pipeline ------------------------------------------------ ----------------------------------- Source: Morgan Stanley SEC Filings, Earnings Conference Call (1) Net Exposure is defined as potential loss to the Finn in an event of 100% default, assuming zero recovery, over a period of time. The value of these positions remains subject to mark-to-market volatility. Positive amounts indicate potential loss (long position) in a default scenario. Negative amounts indicate potential gain (short position) in a default scenario. 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, non-public information. The presentation has not been updated since it was originally presented. 15

LEVEL 3 ASSETS ---------------------------------------------------------------------------------------------------- Total Assets ($Bn) 1,182 1,200 1,185 1,045 1,091 1,031 77 78 69 54 58 74 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 Level 3 Assets (1) Level 3 Assets as % of Total Assets: 4.5% 4.8% 6.5% 7.0% 7.1% 6.7% Source: Company SEC Filings and Earnings Releases Notes: (1) Level 3 assets prior to 4007 have been restated 10 include netting among positions classified within the same level in that level. Previously, these positions were shown on a gross basis with the netting in a separate column. 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, non-public information. The presentation has not been updated since it was originally presented. 16

OPERATING DISCIPLINE Three Key Tenets Capital o Risk Adjusted Return on Capital o Temporarily suspended share buyback program o CIC Investment Balance Sheet o Reduced both gross and adjusted leveraged ratios during 2Q08 o Reallocated balance sheet to liquid assets with significant two-way customer flows Liquidity o Reduced re-financing risk o Strengthened liquidity position at the parent level 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, non-public information. The presentation has not been updated since it was originally presented. 17

CAPITAL STRENGTH - 2Q08 Total Capital Ratio -18.6% ($Bn) o Common Equity $33 o Tier 1 Eligible Capital $12 o Less: Goodwill & Intangibles"', ($8) Net Deferred Tax Assets & Debt Valuation Adjustment ---------------------------------------------------------------- Tier 1 Capital $37 ---------------------------------------------------------------- o Subordinated Debt $4 o Qualifying Long-Term Debt $15 ---------------------------------------------------------------- Tier 2 Capital $19 ---------------------------------------------------------------- Total Capital $56 ================================================================ Tier 1 Ratio - 12.4% Risk Weighted Assets by Risk Type o Market $100 $147 o Credit $52 o Operational ---------------------------------------------------------------- Total Risk Weighted Assets $299 ================================================================ Source: Company SEC Filings and Earnings Conference Call (1) Goodwill & Intangibles includes mortgage servicing rights 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, non-public information. The presentation has not been updated since it was originally presented. 18

TOTAL CAPITAL ------------------------------------------------------------------------- Total and Adjusted Assets ($Bn) 1,182 1,200 1,185 1,091 1,045 1,031 654 704 689 566 637 579 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 Adjusted Assets ----------------------------------------------------------------------- Total Capital (1) 177.3 187.3 187.5 191.1 198.2 210.1 Total Capital as a % Total Assets 15 16 16 18 18 20 ------------------------------------------------------------------------- Source: Morgan Stanley SEC Filings and Earnings Conference Call (1) These amounts indude the non-current portion of longo termborrowings (including capital Units and junior subordinated debt issued to capital trusts) and shareholders equity. 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, non-public information. The presentation has not been updated since it was originally presented. 19

ACTIVE CAPITAL MANAGEMENT ---------------------------------------------------------------------------------------------------- Tangible Shareholders'Equity and Leverage Ratios Tangible Equity ($Bn) 39 40 37 40 41 32 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 -------------------------------------------------------------------------------------- Leverage Ratio(1) 30.6x 29.8x 32.3x 32.6x 27.4x 25.1x Adjusted Leverage Ratio(2) 16.9x 17.5x 18.8x 17.6x 16.0x 14.1x Source: Company SEC Filings and Eamings Conference Call (1) Leverage ratio equals total assets divided by tangible shareholders'equity. (2) Adjusted leverage ratio equals adjusted total assets divided by tangible shareholders'equity. 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, non-public information. The presentation has not been updated since it was originally presented. 20

LIQUIDITY FRAMEWORK Contingency Funding Plan Capital Markets Activity o Starting Cash o Type of Debt o Inflows I Outflows o Sourcing Channel o Business Unit Demands o Tenor o Stresses o Net Liquidity Position Business Unit Plans I Demands o Client Flows o Client Strategic Funding o Market Conditions 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, non-public information. The presentation has not been updated since it was originally presented. 21

CONTINGENCY FUNDING PLAN 0 Time 1-Year Starting Cash (+/-) Known Inflows and Outflows (+/-) Probable Inflows and Outflows (+/-) Additional Uses Apply Stress Scenarios =Ending Liquidity 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, non-public information. The presentation has not been updated since it was originally presented. 22

LIQUIDITY ----------------------------------------------------------------------------------------------- Average Liquidity Reserves per Quarter ($Bn) 169 135 120 122 93 51 64 68 56 44 71 74 80 18 30 49 64 46 38 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 2Q08 Period End Parent Bank and Non-Bank Subsidiaries ----------------------------------------------------------------------------------------------- Source: Morgan Stanley SEC Filings and Earnings Conference Call 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, non-public information. The presentation has not been updated since it was originally presented. 23

FINANCING -------------------------------------------------------------------------------- Long-Term Debt Issued ($Bn) 80 75 60 48 38 36 40 20 10 21 0 2004 2005 2006 2007 1008 2008 -------------------------------------------------------------------------------- Source: 10K, 100s, and Earnings Conference Call -------------------------------------------------------------------------------- Secured Financing Books Equity Fixed Income Weighted Average Maturity> 40 days -------------------------------------------------------------------------------- Source: Morgan Stanley Earnings Conference Call -------------------------------------------------------------------------------- Long-Term Debt Outstanding AUD 3% JPY 4% Other 4% USD 64% EUR 25% GBP 2% -------------------------------------------------------------------------------- Source: Company Shelf Filings -------------------------------------------------------------------------------- CP Outstanding ($Bn) 28 30 23 24 23 25 20 17 12 15 10 5 0 1007 2007 3007 4007 1008 2008 -------------------------------------------------------------------------------- Source: Morgan Stanley SEC Filings and Earnings Conference Call 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, non-public information. The presentation has not been updated since it was originally presented. 24

CREDIT QUALITY ----------------------------------------------------------------------------------------------- DEBT RATINGS ----------------------------------------------------------------------------------------------- Long-Term Debt Short-Term Debt Dominion Bond Rating Service Limited AA (Low) R-1 (Middle) ----------------------------------------------------------------------------------------------- Fitch Ratings (1) AA- F1+ ----------------------------------------------------------------------------------------------- Moody'sInvestors Service (2) A1 P-1 ----------------------------------------------------------------------------------------------- Rating and Investment Information, Inc. (R&I)(3) AA a-1+ ----------------------------------------------------------------------------------------------- Standard & Poor's(4) A+ A-1 ----------------------------------------------------------------------------------------------- (1) Outlook changed to Negative on December 19, 2006, (2) Long-Term ratings downgraded on August 11, 2008. Stable outlook assigned. (3) Outlook changed to Negative on December 20,2007. (4) Ratings downgraded on June 2, 2008. Negative outlook assigned. 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, non-public information. The presentation has not been updated since it was originally presented. 25