Free Writing Prospectus   

Registration Statement No. 333-131266

Dated October 16, 2008

Filed pursuant to Rule 433

Morgan Stanley Financial Overview Third 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 10-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-Q 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. 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 2 does not contain any material, non-public information. The presentation has not been updated since it was originally presented. 2

Index o Morgan Stanley as a Federal Financial Holding Company o Mitsubishi UFJ Investment o Temporary Liquidity Guarantee o Capital, Liquidity and Funding o Risk Management o Financial Results o Institutional Securities o Global Wealth Management o Asset Management 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 3 does not contain any material, non-public information. The presentation has not been updated since it was originally presented. 3

Morgan Stanley as a Federal Financial Holding Company Federal Financial Holding Company Benefits o New business opportunities o Access to expanded sources of funding and liquidity o Section 23A exemption provides incremental funding flexibility for affiliate capacity Regulation o Federal Reserve o Office of Comptroller of the Currency Capital o "Well-Capitalized" institution o One of the highest Tier 1 Capital Ratios among bank holding company peers 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 4 does not contain any material, non-public information. The presentation has not been updated since it was originally presented. 4

Mitsubishi UFJ Investment (MUFG) Mitsubishi - Morgan Stanley Alliance Strategic Alliance o Global strategic alliance with focus on global corporate and investment banking activities o Steering Committee will be established to maximize strategic benefits of the alliance o MUFG representative to be elected to Morgan Stanley's Board of Directors Transaction Details o 21% interest in Morgan Stanley on a fully diluted basis o $1.2 billion of perpetual non- cumulative non-convertible preferred stock o $7.8 billion of perpetual non-cumulative convertible preferred stock Capital o $9 billion investment further bolsters strong capital and liquidity positions o Exceeded the Federal Reserve's capital and leverage ratio requirements for commercial banks, prior to MUFG's investment 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 5 does not contain any material, non-public information. The presentation has not been updated since it was originally presented. 5

Temporary Liquidity Guarantee Program Systemic Risk Exception of the FDIC Improvement Act of 1991 Eligible Entities o FDIC-insured depository institutions o U.S. bank holding companies o U.S. financial holding companies o Certain U.S. savings and loan holding companies Type of Unsecured Debt o Promissory Notes o Commercial Paper o Inter-bank funding o Any unsecured portion of senior debt Terms o Covered up to 125% of debt outstanding as of September 30, 2008 (scheduled to mature before June 30, 2009) o Debt must be issued on or before June 30, 2009 o Covered for 3 year period, even if the liability has not reached maturity o Fees for coverage waived for the first 30 days 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 6 does not contain any material, non-public information. The presentation has not been updated since it was originally presented. 6

Total Capital Total and Adjusted Assets ($Bn) 1,185 1,045 1,091 1,031 987 900 689 566 637 579 544 3Q07 4Q07 1Q08 2Q08 3Q08 10/7/2008 Adjusted Assets -------------------------------------------------------------------------------- Total Capital (1) 187.5 191.1 198.2 210.1 202.6 Total Capital as a % Total Assets 16% 18% 18% 20% 21% -------------------------------------------------------------------------------- Source: Morgan Stanley SEC Filings (1) These amounts include the non-current portion of long-term borrowings (including Capital Units and junior subordinated debt issued to capital trusts) and shareholders equity. This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The 7 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

Active Capital Management -------------------------------------------------------------------------------- Leverage Ratios(1) 32.3x 32.6x 27.4x 25.1x 23.4x 20.0x 3Q07 4Q07 1Q08 2Q08 3Q08 10/7/2008 -------------------------------------------------------------------------------- Adjusted Leverage Ratio(2) 18.8x 17.6x 16.0x 14.1x 12.9x 10x Tangible Shareholders' Equity ($Bn) 37 32 40 41 42 -------------------------------------------------------------------------------- Source: Morgan Stanley SEC Filings (1) Leverage ratio equals total assets divided by tangible shareholders' equity. (2) Adjusted leverage ratio equals adjusted total assets divided by tangible shareholders' equity. 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 8 does not contain any material, non-public information. The presentation has not been updated since it was originally presented. 8

Capital Strength - 3Q08 -------------------------------------------------------------------------------- Basel II Regulatory Capital ($Bn) 12.4% 12.7% >15.5% 55.6 56.3 14.7 14.4 4.1 4.1 11.5 +9 11.5 34.7 33.4 (7.8) (8.6) 2Q08 3Q08 $9 Bn MUFG Tier 1 Common Equity Tier 2 Subordinated Debt Tier 1 Eligible Capital Qualifying Long-Term Debt Deductibles (1) Source: Morgan Stanley SEC Filings (1) Goodwill & Intangibles, Net Deferred Tax Assets & Debt Valuation Adjustment. Goodwill & Intangibles excludes mortgage servicing rights 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

Average Liquidity Reserves per Quarter ------------------------------------------------------------------------------- ($Bn) Post 3Q08 liquidity reserves remain > 2007 average 175 135 120 122 94 93 56 51 61 64 68 44 18 30 46 49 64 71 74 81 38 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Parent Bank and Non-Bank Subsidiaries ------------------------------------------------------------------------------- Source: Morgan Stanley 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 10 does not contain any material, non-public information. The presentation has not been updated since it was originally presented. 10

Evolution of Funding Diversification Investment Bank Federal Reserve Lending Financial Holding Company Fed Discount Window(4) Term Auction Facility Primary Dealer Credit Facility Expansion (3) Primary Dealer Credit Facility(2) Term Securities Lending Facility(1) Deposits Secured Financing Long-Term Debt Commercial Paper (1) Term Securities Lending Facility - March 11, 2008 (2) Primary Dealer Credit Facility - March 16, 2008 (3) Primary Dealer Credit Facility Expansion -Sept 14, 2008 (4) Fed Discount Window Sept 21, 2008 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 11 does not contain any material, non-public information. The presentation has not been updated since it was originally presented. 11

Sources of Funding CP Outstanding ($Bn) 24 23 17 12 8 3Q07 4Q07 1Q08 2Q08 3Q08 --------------------------------------------------------------------------------- Source: Morgan Stanley SEC Filings Long-Term Debt o 2008 YTD Issuance $38 billion o Ability to issue FDIC insured unsecured debt o Mitigate refinancing risk through staggered maturities Source: Morgan Stanley SEC Filings -------------------------------------------------------------------------------- Expansion of Bank Deposit Program ($Bn) 36 26 13 2 4Q05 4Q06 4Q07 3Q08 --------------------------------------------------------------------------------- Source: Morgan Stanley SEC Filings Secured Financing Books o Secured Financing Book as of 3Q 2008 - Includes central bank eligible assets - $311 billion - Weighted Average Maturity >40 days - 22% overnight o Non-central bank eligible assets - 10% with Weighted Average Maturity >90 days Source: Morgan Stanley earnings conference call 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 12 does not contain any material, non-public information. The presentation has not been updated since it was originally presented. 12

Government Liquidity Facilities Term Securities Primary Dealer Federal Reserve U.S. Government and Agency Securities Lending Facility Credit Facility Discount Window --------------------------------------------------------------------------------------------------------- U.S. Treasuries --------------------------------------------------------------------------------------------------------- Agencies --------------------------------------------------------------------------------------------------------- Agency MBS / GNMA --------------------------------------------------------------------------------------------------------- Agency CMO --------------------------------------------------------------------------------------------------------- Corporate and Other Debt --------------------------------------------------------------------------------------------------------- Commercial Paper / Money Markets --------------------------------------------------------------------------------------------------------- Investment Grade Corporates --------------------------------------------------------------------------------------------------------- Municipals --------------------------------------------------------------------------------------------------------- Asset-Backed Securities / RMBS / CMBS --------------------------------------------------------------------------------------------------------- Non-Investment Grade Bonds --------------------------------------------------------------------------------------------------------- Corporate Equities --------------------------------------------------------------------------------------------------------- Equities --------------------------------------------------------------------------------------------------------- Other Sovereign Government Obligations --------------------------------------------------------------------------------------------------------- Foreign Government Bonds --------------------------------------------------------------------------------------------------------- Non-Securities --------------------------------------------------------------------------------------------------------- Commercial, Industrial, or Agricultural Loans --------------------------------------------------------------------------------------------------------- Consumer Loans --------------------------------------------------------------------------------------------------------- Residential and Commercial Real Estate Loans --------------------------------------------------------------------------------------------------------- This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The 13 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

Marks and Exposures -------------------------------------------------------------------------------- Net Exposure (1) ($Bn) 19.6 17.5 10.9 9.3 7.7 6.5 1.8 3.6 2.7 0.0 ABS CDO / CMBS Other Monoline(2) Leveraged Acquisition Subprime Mortgage-Related Finance Pipeline 4Q 2007 3Q 2008 -------------------------------------------------------------------------------- Source: Morgan Stanley SEC Filings (1) Net Exposure is defined as potential loss to the Firm 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. (2) 3Q 2008 Monoline Composition - ABS: $0.8, Insurance Municipal Bond Securities: $1.5, Net Counterparty Exposure: $0.4. 14

Level 3 Assets Total Assets ($BN) 1Q08 78 1,091 2Q08 69 1,031 3Q08 78 987 Level 3 Assets 7.1% 6.7% 7.9% o Level 3 - Inputs that are unobservable and significant to the overall fair value measurement o Level 2 to Level 3: $3.9 billion of certain Corporate & other debt o Level 3 to Level 2: $1 billion of certain Corporate & other debt Source: Morgan Stanley SEC Filings [LOGO] 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

Consolidated Financial Highlights 3Q08 Highlights Net Revenues ($Bn) 8.0 PBT ($Bn) 1.9 Tier 1 Capital (%) 12.7 Diluted EPS ($) 1.32 Pre-Tax Margin (%) 24 ROE - Annualized Cont. Ops. (%) 16.5 Adjusted Leverage Ration (x) 12.9 Book Value per Share ($) 31.25 Average Total Liquidity ($Bn) 175 Net Revenue Composition - Nine Months 2008 [Graphic] Source: Morgan Stanley SEC Filings (1) Represents combined revenues from Fixed Income Sales and Trading and Other Sales and Trading [LOGO] 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

Regional Net Revenue Growth 2004 Global Revenues $20.3Bn Americas 66% Asia 9% EMEA 25% YTD 2008 Global Revenues $22.9Bn Americas 52% Asia 13% EMEA 35% FY2004 9Mos 2008 Americas (1)($Bn) 13.4 12.0 Europe, Middle East and Africa ($Bn) 5.0 7.9 Asia ($Bn) 1.9 3.0 Source: Morgan Stanley SEC Filings [LOGO] 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

Institutional Securities Net Revenue ($MM) 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Fixed Income (1) 3,232 2,664 1,201 (8,071) 1,667 (105) 1,493 Equity 2,318 2,374 1,880 2,468 3,467 2,103 2,671 Investment Banking 1,032 1,704 1,439 1,363 980 875 1,032 Other Int. Securities (2) 580 687 463 815 99 752 715 Total 7,162 7,429 4,983 (3,425) 6,213 3,625 5,911 Source: Morgan Stanley SEC Filings (1) Represents combined revenues from Fixed Income Sales and Trading and Other Sales and Trading. Other Sales and Trading primarily includes net losses from mark-to-market loans and closed and pipeline commitments, results related to Investment Banking and other activities. (2) 2Q08 and 3Q08 includes pre-tax gains of $744 million and $745 million, respectively, related to the follow-on offerings of MSCI Inc. [LOGO] 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

Global Wealth Management Net Revenue ($MM) 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08(2) 3Q08 Fees 729 769 788 781 716 694 693 Commissions 315 357 353 408 363 346 326 Other (1) 204 204 199 181 143 953 140 Principal Transactions 127 153 148 199 173 207 134 Net Interest & Dividends 136 159 195 220 211 236 262 Total 1,511 1,642 1,683 1,789 1,606 2,436 1,555 Source: Morgan Stanley SEC Filings (1) "Other" includes Investment Banking and Other revenues. (2) 2Q08 includes a pre-tax gain of $748 million on the sale of the Spanish wealth management business, Morgan Stanley Wealth Management S.V., S.A.U. [LOGO] 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

Asset Management Net Revenue ($MM) 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Asset Management Fees 768 844 926 986 (380) (317) (186) Principal Transactions 532 588 338 187 845 779 742 Other (1) 68 77 100 79 78 26 91 Total 1,368 1,509 1,364 1,252 543 488 647 Source: Morgan Stanley SEC Filings (1) "Other" includes Investment Banking, Net Interest and Dividends, Commissions and Other revenues. [LOGO] 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