Morgan Stanley (MS) 10-Q 9 Nov 09 2009 Q3 Quarterly report Financial data

Statement Of Financial Position

Statement Of Financial Position Unclassified - Deposit Based Operations (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Dec. 31, 2008	9 Months Ended Nov. 30, 2008
Assets
Cash and due from banks	$6,218	$13,354	$11,276
Interest bearing deposits with banks	22,392	65,316	67,378
Cash deposited with clearing organizations or segregated under federal and other regulations or requirements	21,753	24,039	25,446
Financial instruments owned, at fair value (approximately $114 billion, $73 billion and $62 billion were pledged to various parties at September 30, 2009, December 31, 2008 and November 30, 2008, respectively):
U.S. government and agency securities	82,881	28,012	20,251
Other sovereign government obligations	39,576	21,084	20,071
Corporate and other debt	94,794	87,294	88,484
Corporate equities	52,310	42,321	37,174
Derivative and other contracts	55,265	89,418	99,766
Investments	9,252	10,385	10,598
Physical commodities	4,418	2,126	2,204
Total financial instruments owned, at fair value	338,496	280,640	278,548
Securities received as collateral, at fair value	16,414	5,231	5,217
Federal funds sold and securities purchased under agreements to resell	146,985	122,709	106,419
Securities borrowed	128,922	88,052	85,785
Receivables:
Customers	25,854	29,265	31,294
Brokers, dealers and clearing organizations	4,937	6,250	7,259
Other loans	6,557	6,547	6,528
Fees, interest and other	11,330	7,258	7,034
Other investments	3,899	3,709	3,309
Premises, equipment and software costs (net of accumulated depreciation of $3,532, $3,073 and $3,003 at September 30, 2009, December 31, 2008 and November 30, 2008, respectively)	6,765	5,095	5,057
Goodwill	6,977	2,256	2,243
Intangible assets (net of accumulated amortization of $390, $208 and $200 at September 30, 2009, December 31, 2008 and November 30, 2008, respectively) (includes $144, $184 and $220 at fair value at September 30, 2009, December 31, 2008 and November 30, 2008, respectively)	5,679	906	947
Other assets	16,325	16,137	15,295
Total assets	769,503	676,764	659,035
Liabilities and Equity
Commercial paper and other short-term borrowings (includes $1,179, $1,246 and $1,412 at fair value at September 30, 2009, December 31, 2008 and November 30, 2008, respectively)	2,913	10,102	10,483
Deposits (includes $7,784, $9,993 and $6,008 at fair value at September 30, 2009, December 31, 2008 and November 30, 2008, respectively)	62,415	51,355	42,755
Financial instruments sold, not yet purchased, at fair value:
U.S. government and agency securities	23,646	11,902	10,156
Other sovereign government obligations	24,020	9,511	9,360
Corporate and other debt	7,743	9,927	9,361
Corporate equities	23,658	16,840	16,547
Derivative and other contracts	39,526	68,554	73,521
Physical commodities	0	33	0
Total financial instruments sold, not yet purchased, at fair value	118,593	116,767	118,945
Obligation to return securities received as collateral, at fair value	16,414	5,231	5,217
Securities sold under agreements to repurchase	147,344	92,213	102,401
Securities loaned	26,182	14,580	14,821
Other secured financings, at fair value	10,278	12,539	12,527
Payables:
Customers	110,765	123,617	115,225
Brokers, dealers and clearing organizations	4,381	1,585	3,141
Interest and dividends	3,143	3,305	2,584
Other liabilities and accrued expenses	18,414	16,179	15,963
Long-term borrowings (includes $37,049, $30,766 and $28,830 at fair value at September 30, 2009, December 31, 2008 and November 30, 2008, respectively)	196,437	179,835	163,437
Liabilities, Total	717,279	627,308	607,499
Commitments and contingencies	-	-	-
Morgan Stanley shareholders' equity:
Preferred stock	9,597	19,168	19,155
Common stock, $0.01 par value; Shares authorized: 3,500,000,000 at September 30, 2009, December 31, 2008 and November 30, 2008; Shares issued: 1,487,850,163 at September 30, 2009, 1,211,701,552 at December 31, 2008 and November 30, 2008; Shares outstanding: 1,358,900,574 at September 30, 2009, 1,074,497,565 at December 31, 2008 and 1,047,598,394 at November 30, 2008	15	12	12
Paid-in capital	8,441	459	1,619
Retained earnings	34,726	36,154	38,096
Employee stock trust	4,058	4,312	3,901
Accumulated other comprehensive loss	(299)	(420)	(125)
Common stock held in treasury, at cost, $0.01 par value; 128,949,589 shares at September 30, 2009, 137,203,987 shares at December 31, 2008 and 164,103,158 shares at November 30, 2008	(6,131)	(6,620)	(7,926)
Common stock issued to employee trust	(4,058)	(4,312)	(3,901)
Total Morgan Stanley shareholders' equity	46,349	48,753	50,831
Non-controlling interests	5,875	703	705
Total equity	52,224	49,456	51,536
Total liabilities and equity	$769,503	$676,764	$659,035

1_Statement Of Financial Positi

Statement Of Financial Position Unclassified - Deposit Based Operations (Parenthetical) (USD $)
	Sep. 30, 2009	Dec. 31, 2008	Nov. 30, 2008
Financial instruments owned, at fair value, pledged to various parties	$114,000,000,000	$73,000,000,000	$62,000,000,000
Premises, equipment and software costs, accumulated depreciation	3,532,000,000	3,073,000,000	3,003,000,000
Intangible assets, accumulated amortization	390,000,000	208,000,000	200,000,000
Intangible assets, fair value	144,000,000	184,000,000	220,000,000
Commercial paper and other short-term borrowings, fair value	1,179,000,000	1,246,000,000	1,412,000,000
Deposits, fair value	7,784,000,000	9,993,000,000	6,008,000,000
Long-term borrowings, fair value	$37,049,000,000	$30,766,000,000	$28,830,000,000
Common stock, par value	0.01	0.01	0.01
Common stock, Shares authorized	3,500,000,000	3,500,000,000	3,500,000,000
Common stock, Shares issued	1,487,850,163	1,211,701,552	1,211,701,552
Common stock, Shares outstanding	1,358,900,574	1,074,497,565	1,047,598,394
Common stock held in treasury, shares	128,949,589	137,203,987	164,103,158

Statement Of Income Interest Ba

Statement Of Income Interest Based Revenue (USD $)
In Millions, except Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Revenues:
Investment banking	$1,226	$1,025	$3,393	$3,284
Principal transactions:
Trading	3,242	13,185	6,304	18,073
Investments	99	(733)	(1,288)	(1,557)
Commissions	1,247	1,107	2,994	3,488
Asset management, distribution and administration fees	2,023	1,379	4,289	4,325
Other	257	1,271	1,093	2,495
Total non-interest revenues	8,094	17,234	16,785	30,108
Interest and dividends	1,989	9,626	5,906	31,532
Interest expense	1,408	8,849	5,659	29,700
Net interest	581	777	247	1,832
Net revenues	8,675	18,011	17,032	31,940
Non-interest expenses:
Compensation and benefits	4,961	5,059	10,872	11,970
Occupancy and equipment	424	316	1,139	930
Brokerage, clearing and exchange fees	309	394	868	1,285
Information processing and communications	360	298	963	903
Marketing and business development	126	166	370	557
Professional services	403	401	1,130	1,253
Other	877	696	2,002	1,472
Total non-interest expenses	7,460	7,330	17,344	18,370
Income (losses) from continuing operations before income taxes	1,215	10,681	(312)	13,570
Provision for (benefit from) income taxes	422	2,974	(615)	3,759
Income from continuing operations	793	7,707	303	9,811
Discontinued operations:
Gain from discontinued operations (including gain on disposal of $499 million in the nine months ended September 30, 2009)	0	756	537	1,553
Provision for income taxes	0	292	204	602
Gain on discontinued operations	0	464	333	951
Net income	793	8,171	636	10,762
Net income (loss) applicable to non-controlling interests	36	20	(93)	55
Net income (loss) applicable to Morgan Stanley	757	8,151	729	10,707
Earnings (losses) applicable to Morgan Stanley common shareholders	498	7,684	(1,301)	10,030
Amounts applicable to Morgan Stanley:
Income from continuing operations	757	7,700	412	9,784
Net gain from discontinued operations after tax	0	451	317	923
Net income (loss) applicable to Morgan Stanley	$757	$8,151	$729	$10,707
Earnings (losses) per basic common share:
Income (loss) from continuing operations	0.39	6.97	-1.41	8.82
Gain on discontinued operations	$0	0.41	0.28	0.84
Earnings (losses) per basic common share	0.39	7.38	-1.13	9.66
Earnings (losses) per diluted common share:
Income (loss) from continuing operations	0.38	6.97	-1.41	8.8
Gain on discontinued operations	$0	0.41	0.28	0.83
Earnings (losses) per diluted common share	0.38	7.38	-1.13	9.63
Average common shares outstanding:
Basic	1,294,298,229	1,040,887,906	1,148,161,310	1,038,803,052
Diluted	1,300,070,107	1,041,677,018	1,148,161,310	1,041,808,270

2_Statement Of Income Interest

Statement Of Income Interest Based Revenue (Parenthetical) (USD $)
In Millions	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Gain from discontinued operations, gain on disposal	$0	$0	$499	$0

Statement Of Other Comprehensiv

Statement Of Other Comprehensive Income (USD $)
In Millions	3 Months Ended Sep. 30, 2009		3 Months Ended Sep. 30, 2008		9 Months Ended Sep. 30, 2009		9 Months Ended Sep. 30, 2008
Net income	$793		$8,171		$636		$10,762
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	40	[2]	(202)	[2]	98	[2]	(252)	[2]
Net change in cash flow hedges	2	[3]	5	[3]	10	[3]	14	[3]
Amortization of net loss related to pension and postretirement benefits	8	[4]	4	[4]	20	[4]	14	[4]
Amortization of prior service credit related to pension and postretirement benefits	(1)	[1]	(2)	[1]	(4)	[1]	(4)	[1]
Comprehensive income	842		7,976		760		10,534
Net income (loss) applicable to non-controlling interests	36		20		(93)		55
Other comprehensive income (loss) applicable to non-controlling interests	6		(53)		3		(58)
Comprehensive income applicable to Morgan Stanley	$800		$8,009		$850		$10,537
[1]Amounts are net of (benefit from) income taxes of $(2) million and $(1) million for the quarters ended September 30, 2009 and September 30, 2008, respectively. Amounts are net of (benefit from) income taxes of $(3) million for the nine month periods ended September 30, 2009 and September 30, 2008.
[2]Amounts are net of (benefit from) provision for income taxes of $(106) million and $279 million for the quarters ended September 30, 2009 and September 30, 2008, respectively. Amounts are net of (benefit from) provision for income taxes of $(317) million and $112 million for the nine month periods ended September 30, 2009 and September 30, 2008, respectively.
[3]Amounts are net of provision for income taxes of $2 million for the quarters ended September 30, 2009 and September 30, 2008. Amounts are net of provision for income taxes of $6 million and $9 million for the nine month periods ended September 30, 2009 and September 30, 2008, respectively.
[4]Amounts are net of provision for income taxes of $3 million for the quarters ended September 30, 2009 and September 30, 2008. Amounts are net of provision for income taxes of $12 million and $9 million for the nine month periods ended September 30, 2009 and September 30, 2008, respectively.

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect Deposit Based Operations (USD $)
In Millions	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008	Dec. 31, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$793	$8,171	$636	$10,762
Adjustments to reconcile net income to net cash (used for) provided by operating activities:
Compensation payable in common stock and options			1,021	1,637
Depreciation and amortization			829	532
Gain on business dispositions			(480)	(2,232)
Impairment charges			689	0
Changes in assets and liabilities:
Cash deposited with clearing organizations or segregated under federal and other regulations or requirements			2,286	12,482
Financial instruments owned, net of financial instruments sold, not yet purchased			(52,560)	2,295
Securities borrowed			(40,870)	77,563
Securities loaned			11,602	(79,488)
Receivables and other assets			(1,029)	16,488
Payables and other liabilities			(3,167)	(50,944)
Federal funds sold and securities purchased under agreements to resell			(24,276)	(13,953)
Securities sold under agreements to repurchase			55,131	87,848
Net cash (used for) provided by operating activities			(50,188)	62,990
Net (payments for) proceeds from:
Premises, equipment and software costs			(2,307)	(1,368)
Business acquisitions, net of cash acquired			(2,160)	(174)
Business dispositions			565	743
Net cash (used for) investing activities			(3,902)	(799)
Net (payments for) proceeds from:
Short-term borrowings			(7,189)	(16,870)
Non-controlling interests			0	1,005
Derivatives financing activities			(78)	855
Other secured financings			(2,261)	(9,616)
Deposits			11,060	2,500
Excess tax benefits associated with stock-based awards			12	0
Net proceeds from:
Morgan Stanley public offerings of common stock			6,212	0
Issuance of common stock			41	296
Issuance of long-term borrowings			36,342	30,159
Payments for:
Long-term borrowings			(28,546)	(38,506)
Series D Preferred Stock and warrant			(10,950)	0
Repurchases of common stock through capital management share repurchase program			0	(487)
Repurchases of common stock for employee tax withholding			(37)	(1,104)
Cash dividends			(1,445)	(935)
Net cash provided by (used for) financing activities			3,161	(32,703)
Effect of exchange rate changes on cash and cash equivalents			869	(581)
Net (decrease) increase in cash and cash equivalents			(50,060)	28,907
Cash and cash equivalents, at beginning of period			78,670	24,659
Cash and cash equivalents, at end of period	28,610	53,566	28,610	53,566	78,670
Cash and cash equivalents include:
Cash and due from banks			6,218	25,958	13,354
Interest bearing deposits with banks			22,392	27,608	65,316
Cash and cash equivalents, at end of period	$28,610	$53,566	$28,610	$53,566	$78,670

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions	Preferred Stock	Common Stock	Paid-in Capital	Retained Earnings	Employee Stock Trust	Accumulated Other Comprehensive Loss	Common Stock Held in Treasury at Cost	Common Stock Issued to Employee Trust	Non-controlling Interest	Other Morgan Stanley Common Equity	Total
BEGINNING BALANCE at Dec. 31, 2007	$1,100	$12							$1,571	$30,665	$33,348
Net income									55	10,707	10,762
Dividends									(39)	(914)	(953)
Shares issued under employee plans and related tax effects										1,856	1,856
Repurchases of common stock										(1,591)	(1,591)
Net change in cash flow hedges										14	14	[2]
Pension and other postretirement adjustments										10	10
Foreign currency translation adjustments									(58)	(194)	(252)	[1]
Other										(74)	(74)
Increases in non-controlling interests related to Morgan Stanley Smith Barney transaction									132		132
Decreases in non-controlling interests related to disposition of a subsidiary									(514)		(514)
Other increases in non-controlling interests									(6)		(6)
ENDING BALANCE at Sep. 30, 2008	1,100	12							1,141	40,479	42,732
BEGINNING BALANCE at Jun. 30, 2008	1,100	12
ENDING BALANCE at Sep. 30, 2008	1,100	12
BEGINNING BALANCE at Dec. 31, 2008	19,168	12	459	36,154	4,312	(420)	(6,620)	(4,312)	703		49,456
Net income				729					(93)		636
Dividends				(1,023)					(17)		(1,040)
Shares issued under employee plans and related tax effects			307		(254)		526	254			833
Repurchases of common stock							(37)				(37)
Morgan Stanley public offerings of common stock		3	6,209								6,212
Preferred stock extinguished and exchanged for common stock	(503)		705	(202)							0
Series D preferred stock and warrant	(9,068)		(950)	(932)							(10,950)
Gain on Morgan Stanley Smith Barney transaction			1,711								1,711
Net change in cash flow hedges						10					10	[2]
Pension and other postretirement adjustments						16					16
Foreign currency translation adjustments						95			3		98	[1]
Increases in non-controlling interests related to Morgan Stanley Smith Barney transaction									4,821		4,821
Increases in non-controlling interests related to the consolidation of two real estate funds sponsored by the Company									649		649
Decreases in non-controlling interests related to disposition of a subsidiary									(229)		(229)
Other increases in non-controlling interests									38		38
ENDING BALANCE at Sep. 30, 2009	$9,597	$15	$8,441	$34,726	$4,058	($299)	($6,131)	($4,058)	$5,875		$52,224
[1]Amounts are net of (benefit from) provision for income taxes of $(106) million and $279 million for the quarters ended September 30, 2009 and September 30, 2008, respectively. Amounts are net of (benefit from) provision for income taxes of $(317) million and $112 million for the nine month periods ended September 30, 2009 and September 30, 2008, respectively.
[2]Amounts are net of provision for income taxes of $2 million for the quarters ended September 30, 2009 and September 30, 2008. Amounts are net of provision for income taxes of $6 million and $9 million for the nine month periods ended September 30, 2009 and September 30, 2008, respectively.

1.Basis of Presentation and Sum

1.Basis of Presentation and Summary of Significant Accounting Policies.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
1.Basis of Presentation and Summary of Significant Accounting Policies.	1. Basis of Presentation and Summary of Significant Accounting Policies. The Company.Morgan Stanley (or the Company) is a global financial services firm that maintains significant market positions in each of its business segmentsInstitutional Securities, Global Wealth Management Group and Asset Management. A summary of the activities of each of the Companys business segments is as follows: Institutional Securities includes capital raising; financial advisory services, including advice on mergers and acquisitions, restructurings, real estate and project finance; corporate lending; sales, trading, financing and market-making activities in equity and fixed income securities and related products, including foreign exchange and commodities; and investment activities. Global Wealth Management Group, which includesthe Companys 51% interestin Morgan Stanley Smith Barney Holdings LLC (MSSB) (see Note 2), provides brokerage and investment advisory services covering various investment alternatives; financial and wealth planning services; annuity and other insurance products; credit and other lending products; cash management services; retirement services; and trust and fiduciary services. Asset Management provides global asset management products and services in equity, fixed income, alternative investments, which includes hedge funds and funds of funds, and merchant banking, which includes real estate, private equity and infrastructure, to institutional and retail clients through proprietary and third-party distribution channels. Asset Management also engages in investment activities. Discontinued Operations. MSCI.InMay 2009, the Companydivested all of its remaining ownership interest in MSCI Inc.(MSCI). The results of MSCI are reported as discontinued operations for all periods presented. The results of MSCI were formerly included in the continuing operations of the Institutional Securities business segment. Crescent.In addition, discontinued operations in the quarter and nine month period ended September30, 2008 include operating results and gains (losses) related to the disposition of certain properties previously owned by Crescent Real Estate Equities Limited Partnership (Crescent), a real estate subsidiary of the Company. The results of certain Crescent properties previously owned by the Company were formerly included in the Asset Management business segment. See Note 20 for additional information on discontinued operations. Basis of Financial Information.The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S., which require the Company to make estimates and assumptions regarding the valuations of certain financial instruments, the valuation of goodwill, the outcome of litigation and tax matters, incentive-based accruals and other matters that affect the condensed consolidated financial statements and related disclosures. The Company believes that the estimates utilized in the preparation of the condensed consolidated financial statements are prudent and reasonable. Actual results could differ materially from these estimates. All material i

2.Morgan Stanley Smith Barney H

2.Morgan Stanley Smith Barney Holdings LLC.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
2.Morgan Stanley Smith Barney Holdings LLC.	2. Morgan Stanley Smith Barney Holdings LLC. Smith Barney.On May31, 2009 (the Closing Date), the Company and Citigroup Inc. (Citi) consummated the previously announced combination of the Companys Global Wealth Management Group and the businesses of Citis Smith Barney in the U.S., Quilter in the U.K., and Smith Barney Australia (Smith Barney). In addition to the Companys contribution of respective businesses to MSSB, the Company paid Citi $2,755million in cash. The combined businesses operate as MSSB, which the Company consolidates. Pursuant to the terms of the amended contribution agreement, dated as of May 29, 2009 (amended contribution agreement), certain businesses of Smith Barney and Morgan Stanley will be contributed to MSSB subsequent to May31, 2009 (the delayed contribution businesses). Citi will own the delayed contribution businesses until they are transferred to MSSB and gains and losses from such businesses will be allocated to the Companys and Citis respective share of MSSBs gains and losses. The Company owns 51% and Citi owns 49% of MSSB, with the Company having appointed four directors to the MSSB board and Citi having appointed two directors. As part of the acquisition, the Company has the option (i)following the third anniversary of the Closing Date to purchase a portion of Citis interest in MSSB representing 14% of the total outstanding MSSB interests, (ii)following the fourth anniversary of the Closing Date to purchase a portion of Citis interest in MSSB representing an additional 15% of the total outstanding MSSB interests and (iii)following the fifth anniversary of the Closing Date to purchase the remainder of Citis interest in MSSB. The Company may call all of Citis interest in MSSB upon a change in control of Citi. Citi may put all of its interest in MSSB to the Company upon a change in control of the Company or following the later of the sixth anniversary of the Closing Date and the one-year anniversary of the Companys exercise of the call described in clause (ii)above. The purchase price for the call and put rights described above is the fair market value of the purchased interests determined pursuant to an appraisal process. As of May31, 2009, the Company includes MSSB in its condensed consolidated financial statements. The results of MSSB are included within the Global Wealth Management Group business segment. See Note 11 for further information on MSSB. The Company accounted for the transaction using the acquisition method of accounting. The fair value of the total consideration transferred to Citi amounted to approximately $6,087 million and the preliminary fair value of Citis equity in MSSB was approximately $3,973 million. The acquisition method of accounting prescribes the full goodwill method even in business combinations in which the acquirer holds less than 100% of the equity interests in the acquiree at acquisition date. Accordingly, the full fair value of Smith Barney was allocated to the fair value of assets acquired and liabilities assumed to derive the preliminary goodwill amount of approximately $5,029million, which represents synergies of combining the two businesses. The Company is stil

3.Fair Value Disclosures.

3.Fair Value Disclosures.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
3.Fair Value Disclosures.	3. Fair Value Disclosures. Fair Value Measurements. A description of the valuation techniques applied to the Companys major categories of assets and liabilities measured at fair value on a recurring basis follows. Financial Instruments Owned and Financial Instruments Sold, Not Yet Purchased U.S. Government and Agency Securities U.S. Treasury Securities.U.S. treasury securities are valued using quoted market prices. Valuation adjustments are not applied. Accordingly, U.S. treasury securities are generally categorized in Level1 of the fair value hierarchy. U.S. Agency Securities.U.S. agency securities are comprised of two main categories consisting of agency issued debt and mortgage pass-throughs. Non-callable agency issued debt securities are generally valued using quoted market prices. Callable agency issued debt securities are valued by benchmarking model-derived prices to quoted market prices and trade data for identical or comparable securities. Mortgage pass-throughs include mortgage pass-throughs and forward settling mortgage pools. Fair value ofmortgage pass-throughs are model driven with respect to spreads of the comparable To-be-announced (TBA) security. Actively traded non-callable agency issued debt securities are categorized in Level 1 of the fair value hierarchy. Callable agency issued debt securities and mortgage pass-throughs are generally categorized in Level 2 of the fair value hierarchy. Other Sovereign Government Obligations Foreign sovereign government obligations are valued using quoted prices in active markets when available. To the extent quoted prices are not available, fair value is determined based on a valuation model that has as inputs interest rate yield curves, cross-currency basis index spreads, and country credit spreads for structures similar to the bond in terms of issuer, maturity and seniority. These bonds are generally categorized in Levels 1 or 2 of the fair value hierarchy. Corporate and Other Debt State and Municipal Securities.The fair value of state and municipal securities is estimated using recently executed transactions, market price quotations and pricing models that factor in, where applicable, interest rates, bond or credit default swap spreads and volatility. These bonds are generally categorized in Level 2 of the fair value hierarchy. Residential Mortgage-Backed Securities (RMBS), Commercial Mortgage-Backed Securities (CMBS), and other Asset-Backed Securities (ABS).RMBS, CMBS and other ABS may be valued based on external price or spread data. When position-specific external price data are not observable, the valuation is based on prices of comparable bonds. Valuation levels of RMBS and CMBS indices are used as an additional data point for benchmarking purposes or to price outright index positions. Fair value for retainedinterests in securitized financial assets(in the form of one or more tranches of the securitization) is determined usingobservable pricesor,in cases where observablepricesare notavailable for certain retained interests,the Company estimates fair value based on the present value of expected futur

4.Collateralized Transactions.

4.Collateralized Transactions.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
4.Collateralized Transactions.	4. Collateralized Transactions. Securities purchased under agreements to resell (reverse repurchase agreements) and Securities sold under agreements to repurchase (repurchase agreements), principally government and agency securities, are carried at the amounts at which the securities subsequently will be resold or reacquired as specified in the respective agreements; such amounts include accrued interest. Reverse repurchase agreements and repurchase agreements are presented on a net-by-counterparty basis, when appropriate. The Companys policy is generally to take possession of securities purchased under agreements to resell. Securities borrowed and Securities loaned are carried at the amounts of cash collateral advanced and received in connection with the transactions. Other secured financings include the liabilities related to transfers of financial assets that are accounted for as financings rather than sales, consolidated VIEs where the Company is deemed to be the primary beneficiary, and certain equity-referenced securities and loans where in all instances these liabilities are payable solely from the cash flows of the related assets accounted for as Financial instruments owned (see Note 5). The Company pledges its financial instruments owned to collateralize repurchase agreements and other securities financings. Pledged financial instruments that can be sold or repledged by the secured party are identified as Financial instruments owned (pledged to various parties) in the condensed consolidated statements of financial condition. The carrying value and classification of financial instruments owned by the Company that have been loaned or pledged to counterparties where those counterparties do not have the right to sell or repledge the collateral were as follows: At September30, 2009 At December31, 2008 At November30, 2008 (dollars in millions) Financial instruments owned: U.S. government and agency securities $ 26,941 $ 9,134 $ 7,701 Other sovereign government obligations 7,861 2,570 626 Corporate and other debt 12,314 21,850 33,037 Corporate equities 9,776 4,388 5,726 Total $ 56,892 $ 37,942 $ 47,090 The Company enters into reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions to, among other things, acquire securities to cover short positions and settle other securities obligations, to accommodate customers needs and to finance the Companys inventory positions. The Company also engages in securities financing transactions for customers through margin lending. Under these agreements and transactions, the Company either receives or provides collateral, including U.S. government and agency securities, other sovereign government obligations, corporate and other debt, and corporate equities. The Company receives collateral in the form of securities in connection with reverse repurchase agreements, securities borrowed and derivative transactions, and customer margin loans. In many cases, the Company is permitted to se

5.Securitization Activities and

5.Securitization Activities and Variable Interest Entities.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
5.Securitization Activities and Variable Interest Entities.	5. Securitization Activities and Variable Interest Entities. Securitization Activities and Qualifying Special Purpose Entities. Securitization Activities.In a securitization transaction, the Company transfers assets (generally commercial or residential mortgage loans or U.S. agency securities) to a special purpose entity (an SPE), sells to investors most of the beneficial interests, such as notes or certificates, issued by the SPE and in many cases retains other beneficial interests. In many securitization transactions involving commercial mortgage loans, the Company transfers a portion of the assets transferred to the SPE with unrelated parties transferring the remaining assets. The purchase of the transferred assets by the SPE is financed through the sale of these interests. In some of these transactions, primarily involving residential mortgage loans in the U.S. and Europe and commercial mortgage loans in Europe, the Company serves as servicer for some or all of the transferred loans. In many securitizations, particularly involving residential mortgage loans, the Company also enters into derivative transactions, primarily interest rate swaps or interest rate caps, with the SPE. In most of these transactions, the SPE meets the criteria to be a QSPE under the accounting guidance for the transfer and servicing of financial assets. The Company does not consolidate QSPEs if they meet certain criteria regarding the types of assets and derivatives they may hold, the activities in which they may engage and the range of discretion they may exercise in connection with the assets they hold. The determination of whether an SPE meets the criteria to be a QSPE requires considerable judgment, particularly in evaluating whether the permitted activities of the SPE are significantly limited and in determining whether derivatives held by the SPE are passive and not excessive. The primary risk retained by the Company in connection with these transactions generally is limited to the beneficial interests issued by the SPE that are owned by the Company, with the risk highest on the most subordinate class of beneficial interests. Where the QSPE criteria are met, these beneficial interests generally are included in Financial instruments ownedcorporate and other debt and are measured at fair value. The Company does not provide additional support in these transactions through contractual facilities, such as liquidity facilities, guarantees, or similar derivatives. Although not obligated, the Company generally makes a market in the securities issued by SPEs in these transactions. As a market maker, the Company offers to buy these securities from, and sell these securities to, investors. Securities purchased through these market-making activities are not considered to be retained interests, although these beneficial interests generally are included in Financial instruments ownedcorporate and other debt securities and are measured at fair value. The Company enters into derivatives, generally interest rate swaps and interest rate caps with a senior payment priority in many securitization transactions. The risks associated with these and similar der

6.Goodwill and Net Intangible A

6.Goodwill and Net Intangible Assets.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
6.Goodwill and Net Intangible Assets.	6. Goodwill and Net Intangible Assets. Goodwill and net intangible assets increased during the quarter due to the acquisition of Citi Managed Futures. In addition, goodwill and net intangible assets increased during the nine month period ended September30, 2009 primarily due to MSSB (see Note 2). The Company tests goodwill for impairment on an annual basis and on an interim basis when certain events or circumstances exist. The Company tests for impairment at the reporting unit level, which is generally one level below its business segments. Goodwill impairment is determined by comparing the estimated fair value of a reporting unit with its respective book value. If the estimated fair value exceeds the book value, goodwill at the reporting unit level is not deemed to be impaired. If the estimated fair value is below book value, however, further analysis is required to determine the amount of the impairment. The estimated fair values of the reporting units are generally determined utilizing methodologies that incorporate price-to-book, price-to-earnings and assets under management multiples of certain comparable companies. The Company completed its annual goodwill impairment testing as of June 1, 2009 and 2008. During the quarter ended September 30, 2009, the Company changed the date of its annual goodwill impairment testing to July 1, as a result of the Companys change in its fiscal year-end from November 30 to December 31 of each year. The change to the annual goodwill impairment testing date was to move the impairment testing outside of the Companys normal second quarter-end reporting process to a date in the third quarter, consistent with the testing date prior to the change in the fiscal year-end. The Company believes that the resulting change in accounting principle related to the annual testing date will not delay, accelerate, or avoid an impairment charge. Goodwill impairment tests performed as of July1, 2009 concluded that no impairment charges were required as of that date. The Company determined that the change in accounting principle related to the annual testing date is preferable under the circumstances and does not result in adjustments to the Companys condensed consolidated financial statements when applied retrospectively. Changes in the carrying amount of the Companys goodwill and intangible assets for the one month period ended December31, 2008 and the nine month period ended September30, 2009 were as follows: Institutional Securities Global Wealth ManagementGroup Asset Management Total (dollars in millions) Goodwill: Balance at November30, 2008 $ 800 $ 272 $ 1,171 $ 2,243 Foreign currency translation adjustments and other 13 13 Balance at December31, 2008 813 272 1,171 2,256 Foreign currency translation adjustments and other 9 9 Goodwill acquired during the period(1) 5,165 5,165 Goodwill disposed of during the period(2) (453 ) (453 ) Balance at September

7.Long-Term Borrowings.

7.Long-Term Borrowings.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
7.Long-Term Borrowings.	7. Long-Term Borrowings. The Companys long-term borrowings included the following components: AtSeptember30, 2009 AtDecember31, 2008 AtNovember30, 2008 (dollars in millions) Senior debt $ 181,710 $ 165,181 $ 148,959 Subordinated debt 4,026 4,342 4,212 Junior subordinated debentures 10,701 10,312 10,266 Total $ 196,437 $ 179,835 $ 163,437 During the nine month period ended September30, 2009, the Company issued notes with a principal amount of approximately $36 billion. The amount included non-U.S. dollar currency notes aggregating approximately $4.4 billion. These notes include the public issuance of $8.5 billion of senior unsecured notes that were not guaranteed by the Federal Deposit Insurance Corporation (FDIC). During the nine month period ended September30, 2009, approximately $29 billion of notes were repaid. The weighted average maturity of the Companys long-term borrowings, based upon stated maturity dates, was approximately 5.7 years and 6.3 years as of September30, 2009 and December31, 2008, respectively. A subsidiary of the Company has loans outstanding of approximately $2.5 billion under third-party financing related to Crescent Real Estate Equities Limited Partnership (Crescent), a real estate subsidiary of the Company. These loans are non-recourse and are secured only by Crescents assets. Approximately $2.0billion of the third-party financing is with a single lender (the Lender) to whom the Company has provided credit support with respect to limited exceptions to the non-recourse provisions for the maximum amount of $125 million. Such Lender financing, which was originally scheduled to mature on August3, 2009, was extended to November2, 2009, and has been further extended until November9, 2009. Negotiations continue with the Lender and various options are being pursued, including conveying Crescents assets in satisfaction of the loan or seeking a negotiated or non-negotiated reorganization of the Crescent entities under insolvency laws. The Company cannot provide assurance that the Lender will further extend the maturity of the financing or that the loan will not eventually go into default. FDIC Temporary Liquidity Guarantee Program (TLGP). As of September30, 2009, the Company had long-term debt outstanding of $23.8 billion under the TLGP. As of December31, 2008, the Company had commercial paper and long-term debt outstanding of $6.4 billion and $9.8 billion, respectively, under the TLGP. These borrowings are senior unsecured debt obligations of the Company and guaranteed by the FDIC under the TLGP. The FDIC has concluded that the guarantee is backed by the full faith and credit of the U.S. government.

8.Derivative Instruments and He

8.Derivative Instruments and Hedging Activities.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
8.Derivative Instruments and Hedging Activities.	8. Derivative Instruments and Hedging Activities. The Company trades, makes markets and takes proprietary positions globally in listed futures, OTC swaps, forwards, options and other derivatives referencing, among other things, interest rates, currencies, investment grade and non-investment grade corporate credits, loans, bonds, U.S. and other sovereign securities, emerging market bonds and loans, credit indices, asset-backed security indices, property indices, mortgage-related and other asset-backed securities and real estate loan products. The Company uses these instruments for trading, as well as for asset and liability management. The Company manages its trading positions by employing a variety of risk mitigation strategies. These strategies include diversification of risk exposures and hedging. Hedging activities consist of the purchase or sale of positions in related securities and financial instruments, including a variety of derivative products (e.g., futures, forwards, swaps and options). The Company manages the market risk associated with its trading activities on a Company-wide basis, on a worldwide trading division level and on an individual product basis. The Company incurs credit risk as a dealer in OTC derivatives. Credit risk with respect to derivative instruments arises from the failure of a counterparty to perform according to the terms of the contract. The Companys exposure to credit risk at any point in time is represented by the fair value of the derivative contracts reported as assets. The fair value of a derivative represents the amount at which the derivative could be exchanged in an orderly transaction between market participants, and is further described in Notes1 and 3 to the condensed consolidated financial statements. In connection with its derivative activities, the Company may enter into master netting agreements and collateral arrangements with counterparties. These agreements provide the Company with the ability to offset a counterpartys rights and obligations, request additional collateral when necessary or liquidate the collateral in the event of counterparty default. The table below presents a summary by counterparty credit rating and remaining contract maturity of the fair value of OTC derivatives in a gain position as of September30, 2009. Fair value is presented in the final column net of collateral received (principally cash and U.S. government and agency securities): OTC Derivative ProductsFinancial Instruments Owned(1) Credit Rating(2) Years to Maturity Cross-Maturity and CashCollateral Netting(3) NetExposure Post-Cash Collateral NetExposure Post- Collateral Lessthan1 1-3 3-5 Over 5 (dollars in millions) AAA $ 1,148 $ 3,231 $ 4,861 $ 10,801 $ (8,644 ) $ 11,397 $ 10,830 AA 7,940 8,737 6,857 16,982 (29,448 ) 11,068 9,159 A 9,845 11,159 8,749 23,950 (42,177 ) 11,526 10,167 BBB 3,212 4,114 2,799 7,951 (8,904 ) 9,172 6,898 Non-investment grade 3,105 4,120 2,644 4,473

9.Commitments, Guarantees and C

9.Commitments, Guarantees and Contingencies.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
9.Commitments, Guarantees and Contingencies.	9. Commitments, Guarantees and Contingencies. Commitments. The Companys commitments associated with outstanding letters of credit and other financial guarantees obtained to satisfy collateral requirements, investment activities, corporate lending and financing arrangements, mortgage lending and margin lending as of September30, 2009 and December31, 2008 are summarized below by period of expiration. Since commitments associated with these instruments may expire unused, the amounts shown do not necessarily reflect the actual future cash funding requirements: Years to Maturity Total at September30, 2009 Less than 1 1-3 3-5 Over5 (dollars in millions) Letters of credit and other financial guarantees obtained to satisfy collateral requirements $ 734 $ 31 $ $ 7 $ 772 Investment activities 884 756 287 88 2,015 Primary lending commitmentsInvestment grade(1)(2) 8,477 21,782 6,649 52 36,960 Primary lending commitmentsNon-investment grade(1) 755 3,701 2,853 666 7,975 Secondary lending commitments(1) 24 53 92 45 214 Commitments for secured lending transactions 780 813 1,970 3,563 Forward starting reverse repurchase agreements(3) 68,008 68,008 Commercial and residential mortgage-related commitments(1) 1,555 1,555 Underwriting commitments 2,819 2,819 Other commitments(4) 610 1 152 763 Total $ 84,646 $ 27,137 $ 12,003 $ 858 $ 124,644 (1) These commitments are recorded at fair value within Financial instruments owned and Financial instruments sold, not yet purchased in the condensed consolidated statements of financial condition (see Note 3 to the condensed consolidated financial statements). (2) This amount includes commitments to asset-backed commercial paper conduits of $276 million as of September30, 2009, of which $268million have maturities of less than one year and $8 million of which have maturities of one to three years. (3) The Company enters into forward starting securities purchased under agreements to resell (agreements that have a trade date as of or prior to September30, 2009 and settle subsequent to period-end) that are primarily secured by collateral from U.S. government agency securities and other sovereign government obligations. These agreements primarily settle within three business days and as of September30, 2009, $63.0billion of the $68.0 billion settled within three business days. (4) Amount includes a $200 million lending facility to a real estate fund sponsored by the Company. Years to Maturity Total at December31, 2008 Less than 1 1-3 3-5 Over 5 (dollars in millions) Letters of credit and other financial guarantees obtained to satisfy collateral requirements $ 1,983 $ 27 $ $ 7 $ 2,017 Investment activities 1,662 411 164 1,059 3,2

10.Regulatory Requirements.

10.Regulatory Requirements.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
10.Regulatory Requirements.	10. Regulatory Requirements. Morgan Stanley.In September 2008, the Company became a financial holding company subject to the regulation and oversight of the Board of Governors of the Federal Reserve System (the Fed). The Fed establishes capital requirements for the Company, including well-capitalized standards, and evaluates the Companys compliance with such capital requirements. The Office of the Comptroller of the Currency and the Office of Thrift Supervision establish similar capital requirements and standards for the Companys national banks and federal savings bank, respectively. Prior to September 2008, the Company was a consolidated supervised entity as defined by the SEC and subject to SEC regulation. The Company calculates its capital ratios and risk-weighted assets (RWAs) in accordance with the capital adequacy standards for financial holding companies adopted by the Fed. These standards are based upon a framework described in the International Convergence of Capital Measurement and Capital Standards, July 1988, as amended, also referred to as Basel I. In December 2007, the U.S. banking regulators published a final Basel II Accord that requires internationally active banking organizations, as well as certain of its U.S. bank subsidiaries, to implement BaselII standards over the next several years. The Company will be required to implement these Basel II standards as a result of becoming a financial holding company. As of September30, 2009, the Company was in compliance with Basel I capital requirements with ratios of Tier 1 capital to RWAs of 15.4% and total capital to RWAs of 16.5% (6% and 10% being well-capitalized for regulatory purposes, respectively). In addition, financial holding companies are also subject to a Tier 1 leverage ratio as defined by the Fed. The Company calculated its Tier 1 leverage ratio as Tier 1 capital divided by adjusted average total assets (which reflects adjustments for disallowed goodwill, certain intangible assets and deferred tax assets). The adjusted average total assets are derived using weekly balances for the calendar quarter. This ratio as of September30, 2009 was 6.2%. The following table summarizes the capital measures for the Company at September30, 2009 and June30, 2009 (dollars in millions): September30, 2009 June30, 2009 Balance Ratio Balance Ratio (dollars in millions) Tier 1 capital $ 45,962 15.4 % $ 43,817 15.8 % Total capital 49,287 16.5 % 47,348 17.1 % Risk-weighted assets 299,416 276,750 Adjusted average assets 743,362 678,073 Tier 1 leverage 6.2 % 6.5 % The Companys Significant U.S. Bank Operating Subsidiaries.The Companys U.S. bank operating subsidiaries are subject to various regulatory capital requirements as administered by U.S. federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional, discretionary actions by regulators that, if undertaken, could have a direct material effect on the Companys U.S. bank operating subsidiaries financial statements.

11.Total Equity.

11.Total Equity.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
11.Total Equity.	11. Total Equity. Morgan Stanley Shareholders Equity. Treasury Shares.During the nine month period ended September30, 2009, the Company did not purchase any of its common stock as part of its capital management share repurchase program. During the nine month period ended September 30, 2008, the Company repurchased $487 million of its common stock as part of its capital management share repurchase program at an average cost of $20.01 per share. China Investment Corporation Investment.In December 2007, the Company sold Equity Units that included contracts to purchase Company common stock to a wholly owned subsidiary of CIC for gross proceeds of approximately $5,579 million. As a result of the MUFG Transaction referred to below, upon settlement of the Equity Units, CIC will be entitled to receive 116,062,911 shares of the Companys common stock, subject to anti-dilution adjustments. In June 2009, to maintain its pro rata share in the Companys share capital, CIC participated in the Companys registered public offering of 85,890,277 shares by purchasing 45,290,576 shares of the Companys common stock. CIC is a passive financial investor and has no special rights of ownership nor a role in the management of the Company. A substantial portion of the investment proceeds from the offering of the Equity Units was treated as Tier 1 capital for regulatory capital purposes. For a more detailed summary of the Equity Units, including the junior subordinated debentures issued to support trust common and trust preferred securities and the stock purchase contracts, refer to Note 11 to the consolidated financial statements for the fiscal year ended November30, 2008 included in Exhibit 99.1 in the Form 8-K. Prior to the Companys sale to Mitsubishi UFJ Financial Group, Inc. (MUFG) of certain preferred stock for an aggregate purchase price of $9 billion on October13, 2008 (MUFG Transaction), the impact of the Equity Units was reflected in the Companys earnings per diluted common share using the treasury stock method. There was no dilutive impact for the quarter and nine month period ended September30, 2008. Effective October13, 2008, as a result of the adjustment to the Equity Units due to the MUFG Transaction, the Equity Units are now deemed to be participating securities in that the Equity Units have the ability to participate in any dividends the Company declares on common shares above $0.27 per share during any quarterly reporting period via an increase in the number of common shares to be delivered upon settlement of the stock purchase contracts. During the quarter and nine month period ended September30, 2009, no common dividends above $0.27 per share were declared. The Equity Units do not share in any losses of the Company for purposes of calculating EPS. Therefore, if the Company incurs a loss in any reporting period, losses will not be allocated to the Equity Units in the EPS calculation. See Note 1 for further discussion on the two-class method and Note 12 for the dilutive impact for the quarter and nine month period ended September30, 2009. Common Equity Offerings.During the nine month period ended September30, 2009, the Company i

12.Earnings per Common Share.

12.Earnings per Common Share.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
12.Earnings per Common Share.	12. Earningsper Common Share. Basic EPS is computed by dividing income available to Morgan Stanley common shareholders by the weighted average number of common shares outstanding for the period. Common shares outstanding include common stock and vested restricted stock unit awards where recipients have satisfied either the explicit vesting terms or retirement-eligible requirements. Diluted EPS reflects the assumed conversion of all dilutive securities. The Company calculates EPS using the two-class method (see Note 1) and determines whether instruments granted in share-based payment transactions are participating securities. The following table presents the calculation of basic and diluted EPS (in millions, except for per share data): Three Months Ended September30, Nine Months Ended September30, 2009 2008 2009 2008 Basic EPS: Income from continuing operations $ 793 $ 7,707 $ 303 $ 9,811 Net gain on discontinued operations 464 333 951 Net income 793 8,171 636 10,762 Net income (loss) applicable to non-controlling interests 36 20 (93 ) 55 Net income applicable to Morgan Stanley 757 8,151 729 10,707 Less: Preferred dividends (Series A Preferred Stock) (11 ) (11 ) (33 ) (36 ) Less: Preferred dividends (Series B Preferred Stock) (196 ) (588 ) Less: Preferred dividends (Series C Preferred Stock) (13 ) (55 ) Less: Partial Redemption of Series C Preferred Stock (202 ) Less: Preferred dividends (Series D Preferred Stock) (212 ) Less: Amortization and acceleration of issuance discount for Series D Preferred Stock (see Note 11) (932 ) Less: Allocation of earnings to unvested restricted stock units(1) (26 ) (456 ) (8 ) (641 ) Less: Allocation of undistributed earnings to Equity Units (13 ) Net income (loss) applicable to Morgan Stanley common shareholders $ 498 $ 7,684 $ (1,301 ) $ 10,030 Weighted average common shares outstanding 1,294 1,041 1,148 1,039 Earnings (losses) per basic common share: Income (losses) from continuing operations $ 0.39 $ 6.97 $ (1.41 ) $ 8.82 Net gain on discontinued operations 0.41 0.28 0.84 Earnings (losses) per basic common share $ 0.39 $ 7.38 $ (1.13 ) $ 9.66 Diluted EPS: Earnings (losses) applicable to Morgan Stanley common shareholders $ 498 $ 7,684 $ (1,301 ) $ 10,030 Weighted average common shares outstanding 1,294 1,041 1,148 1,039 Effect of dilutive securities:

13.Interest and Dividends and I

13.Interest and Dividends and Interest Expense.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
13.Interest and Dividends and Interest Expense.	13. Interest and Dividends and Interest Expense. Details of Interest and dividends revenue and Interest expense were as follows (dollars in millions): Three Months Ended September30, Nine Months Ended September30, 2009 2008 2009 2008 Interest and dividends(1): Financial instruments owned(2) $ 1,421 $ 2,150 $ 3,857 $ 6,496 Receivables from other loans 19 138 120 596 Interest bearing deposits with banks 48 447 224 1,400 Federal funds sold and securities purchased under agreements to resell and securities borrowed 159 4,067 736 12,902 Other 342 2,824 969 10,138 Total Interest and dividends revenues $ 1,989 $ 9,626 $ 5,906 $ 31,532 Interest expense(1): Commercial paper and other short-term borrowings $ 9 $ 74 $ 43 $ 469 Deposits 116 104 365 500 Long-term debt 1,212 2,154 4,073 6,226 Securities sold under agreements to repurchase and securities loaned 283 3,480 1,140 11,735 Other (212 ) 3,037 38 10,770 Total Interest expense 1,408 8,849 5,659 29,700 Net interest and dividends revenues $ 581 $ 777 $ 247 $ 1,832 (1) Interest income and expense and dividend income are recorded within the condensed consolidated statements of income depending on the nature of the instrument and related market conventions. When interest and dividends are included as a component of the instruments fair value, interest and dividends are included within Principal transactionstrading revenues or Principal transactionsinvestment revenues. Otherwise, they are included within Interest and dividends income or Interest expense. (2) Interest expense on Financial instruments sold, not yet purchased is reported as a reduction of Interest and dividends revenues.

14.Sale of Bankruptcy Claims Re

14.Sale of Bankruptcy Claims Related to a Derivative Counterparty.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
14.Sale of Bankruptcy Claims Related to a Derivative Counterparty.	14. Sale of Bankruptcy Claims Related to a Derivative Counterparty. During the quarter ended September30, 2009, the Company entered into multiple participation agreements with certain investors whereby the Company sold undivided participating interests representing 85% (or $1,158 million) of its claims totaling $1,362 million, pursuant to International Swaps and Derivatives Association (ISDA) master agreements, against a derivative counterparty that filed for bankruptcy protection. The Company received cash proceeds of $445 million and recorded a gain on sale of approximately $334 million in the quarter ended September30, 2009. The gain is reflected in the condensed consolidated statement of income in Principal transactions-trading revenues within the Institutional Securities business segment. As a result of the bankruptcy of the derivative counterparty, the Company, as contractually entitled, exercised remedies as the non-defaulting party and determined the value of the claims under the ISDA master agreements in a commercially reasonable manner. The Company filed its claims with the bankruptcy court. In connection with the sale of the undivided participating interests in a portion of the claims, the Company provided certain representations and warranties related to the allowance of the amount stated in the claims submitted to the bankruptcy court. The bankruptcy court will be evaluating all of the claims filed against the derivative counterparty. To the extent, in the future, any portion of the stated claims is disallowed or reduced by the bankruptcy court in excess of a certain amount, then the Company must refund a portion of the purchase price plus interest from the date of the participation agreements to the repayment date. The maximum amount that the Company could be required to refund is the total proceeds of $445 million plus interest. The Company recorded a liability for the fair value of this possible disallowance. The fair value was determined by assessing mid-market values of the underlying transactions, where possible, prevailing bid-offer spreads around the time of the bankruptcy filing, and applying valuation adjustments related to estimating unwind costs. The investors, however, bear full price risk associated with the allowed claims as it relates to the liquidation proceeds from the bankruptcy estate. The Company also agreed to service the claims and, as such, recorded a liability for the fair value of the servicing obligation. The Company will continue to measure these obligations at fair value with changes in fair value recorded in earnings. These obligations are reflected in the condensed consolidated statement of financial condition as Financial instruments sold, not yet purchasedderivatives and other contracts, in Note 3 as Level 3 instruments, and in Note 8 as Derivatives not designated as accounting hedges. The disallowance obligation is also reflected in Note 9 in the guarantees table.

15.Other Revenues.

15.Other Revenues.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
15.Other Revenues.	15. Other Revenues. For the nine month period ended September30, 2009, Other revenues included gains of $485 million from repurchasing the Companys debt in the open market. In fiscal 2008, the Company sold Morgan Stanley Wealth Management S.V., S.A.U., its Spanish onshore mass affluent wealth management business. Other revenues for the nine month period ended September30, 2008 included $743 million related to the sale.

16.Employee Benefit Plans.

16.Employee Benefit Plans.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
16.Employee Benefit Plans.	16. Employee Benefit Plans. The Company maintains various pension and benefit plans for eligible employees. The components of the Companys net periodic benefit expense for its pension and postretirement plans were as follows: ThreeMonths EndedSeptember30, Nine Months EndedSeptember30, 2009 2008 2009 2008 (dollars in millions) Service cost, benefits earned during the period $ 32 $ 28 $ 95 $ 83 Interest cost on projected benefit obligation 41 36 121 109 Expected return on plan assets (31 ) (31 ) (92 ) (96 ) Net amortization of prior service costs (3 ) (3 ) (7 ) (7 ) Net amortization of actuarial loss 11 7 32 23 Net periodic benefit expense $ 50 $ 37 $ 149 $ 112

17.Income Taxes.

17.Income Taxes.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
17.Income Taxes.	17. Income Taxes. The Company is under continuous examination by the Internal Revenue Service (the IRS) and other tax authorities in certain countries, such as Japan and the United Kingdom (the U.K.), and states in which the Company has significant business operations, such as New York. During 2009, the Japanese tax authorities are expected to conclude the field work portion of their examinations on issues covering taxyears 2007 and 2008.During 2010, the IRS isexpected to conclude the field work portion of its examination of issuescovering tax years1999-2005.Also during 2010, the Company expects to reach a conclusion with the U.K. tax authorities on issues through tax year 2007, including those in appeals. The Company regularly assesses the likelihood of additional assessments in each of the taxing jurisdictions resulting from these and subsequent years examinations. The Company has established unrecognized tax benefits that the Company believes are adequate in relation to the potential for additional assessments. Once established, the Company adjusts unrecognized tax benefits only when more information is available or when an event occurs necessitating a change. The Company believes that the resolution of tax matters will not have a material effect on the condensed consolidated statements of financial condition of the Company, although a resolution could have a material impact on the Companys condensed consolidated statements of income for a particular future period and on the Companys effective income tax rate for any period in which such resolution occurs. It is reasonably possible that significant changes in the gross balance of unrecognized tax benefits may occur within the next twelve months. At this time, however, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits and impact on the effective tax rate over the next twelve months.

18.Segment and Geographic Infor

18.Segment and Geographic Information.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
18.Segment and Geographic Information.	18. Segment and Geographic Information. The Company structures its segments primarily based upon the nature of the financial products and services provided to customers and the Companys management organization. The Company provides a wide range of financial products and services to its customers in each of its business segments: Institutional Securities, Global Wealth Management Group and Asset Management. For further discussion of the Companys business segments, see Note1. Revenues and expenses directly associated with each respective segment are included in determining their operating results. Other revenues and expenses that are not directly attributable to a particular segment are allocated based upon the Companys allocation methodologies, generally based on each segments respective net revenues, non-interest expenses or other relevant measures. As a result of treating certain intersegment transactions as transactions with external parties, the Company includes an Intersegment Eliminations category to reconcile the business segment results to the Companys consolidated results. Income before taxes in Intersegment Eliminations primarily represents the effect of timing differences associated with the revenue and expense recognition of commissions paid by the Asset Management business segment to the Global Wealth Management Group business segment associated with sales of certain products and the related compensation costs paid to the Global Wealth Management Group business segments global representatives. Intersegment eliminations also reflect the effect of fees paid by the Institutional Securities business segment to the Global Wealth Management Group business segment related to the bank deposit program. Selected financial information for the Companys business segments is presented below: Three Months Ended September30, 2009 Institutional Securities GlobalWealth Management Group Asset Management Intersegment Eliminations Total (dollars in millions) Total non-interest revenues $ 4,623 $ 2,861 $ 756 $ (146 ) $ 8,094 Net interest 351 168 (58 ) 120 581 Net revenues $ 4,974 $ 3,029 $ 698 $ (26 ) $ 8,675 Income (loss) from continuing operations before income taxes $ 1,290 $ 280 $ (356 ) $ 1 $ 1,215 Provision for (benefit from) income taxes 418 92 (88 ) 422 Net income (loss) 872 188 (268 ) 1 793 Net income (loss) applicable to non-controlling interests 15 83 (62 ) 36 Net income (loss) applicable to Morgan Stanley $ 857 $ 105 $ (206 ) $ 1 $ 757 Three Months Ended September30, 2008 Institutional Securities GlobalWealth Management Group Asset Management Intersegment Eliminations Total (dollars in millions) Total non-interest revenues $ 15,421 $ 1,318 $

19.Joint Venture.

19.Joint Venture.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
19.Joint Venture.	19. Joint Venture. Japan Securities Joint Venture.On March26, 2009, MUFG and the Company announced that they had signed a memorandum of understanding to form a securities joint venture between Mitsubishi UFJ Securities Co., Ltd. and MSJS. Both parties will work to conclude definitive agreements regarding the joint venture. The joint venture is subject to the execution of the definitive agreements and to regulatory approvals and other customary closing conditions. In addition, on June30, 2009, MUFG and the Company announced the creation of a loan marketing joint venture in the Americas starting initially in the U.S., subject to regulatory approvals and other customary closing conditions, and business referral arrangements in Asia, Europe, the Middle East and Africa. MUFG and the Company also entered into a referral agreement for commodities transactions executed outside of Japan and a transfer of personnel between MUFG and the Company for the sharing of best practices and expertise.

20.Discontinued Operations.

20.Discontinued Operations.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
20.Discontinued Operations.	20. Discontinued Operations. MSCI.MSCI is a provider of investment decision support tools to investment institutions worldwide. In the quarter ended June30, 2008 and September30, 2008, the Company sold approximately 53million of its MSCI shares in two secondary offerings (see Note 20 to the consolidated financial statements for the fiscal year ended November30, 2008 included in Exhibit 99.1 in the Form 8-K for further information.) In May 2009, the Company sold all of its remaining 28million shares in MSCI in a secondary offering. In the quarter ended June30, 2009, the Company received net proceeds of approximately $573 million and recognized a pre-tax gain of approximately $499 million ($310 million after-tax), net of underwriting discounts, commissions and offering expenses. The results of MSCI prior to the divestiture are included within discontinued operations for all periods presented and recorded within the Institutional Securities business segment. The table below provides information regarding the MSCI secondary offerings (amounts in millions): Three Months EndedSeptember30, Nine Months EndedSeptember30, 2009 2008 2009 2008 Net proceeds $ $ 780 $ 573 $ 1,560 Net revenues 745 503 1,489 Pre-tax gain 731 499 1,463 Crescent.In addition, discontinued operations in the quarter and nine month period ended September30, 2008 include operating results and gains (losses) related to the disposition of certain properties previously owned by Crescent, a real estate subsidiary of the Company. Net revenues included in discontinued operations related to the properties were $3 million and $6 million for the quarter and nine month period ended September30, 2008, respectively. The results of certain Crescent properties previously owned by the Company were formerly included in the Asset Management business segment. Summarized Financial Information for the Companys discontinued operations for the quarters and nine month periods ended September30, 2009 and 2008: The table below provides information regarding amounts included within discontinued operations (dollars in millions): Three Months Ended September30, Nine Months Ended September30, 2009 2008 2009 2008 (dollars in millions) Pre-tax (loss) gain on discontinued operations: MSCI $ $ 759 $ 537 $ 1,556 Crescent (3 ) (3 ) $ $ 756 $ 537 $ 1,553

21.Subsequent Events.

21.Subsequent Events.
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
21.Subsequent Events.	21. Subsequent Events. Retail Asset Management Business.On October19, 2009, the Company announced as part of a restructuring of its Asset Management business segment a definitive agreement to sell its retail asset management business, including Van Kampen Investments, Inc. (Van Kampen), to Invesco Ltd. (Invesco). This transaction allows the Company to focus on its institutional client base, including corporations, pension plans, large intermediaries, foundations and endowments, sovereign wealth funds, and central banks, among others. Under the terms of the definitive agreement, Invesco will purchase the Companys retail asset management business, operating under both the Morgan Stanley and Van Kampen brands, in a stock and cash transaction valued at $1.5 billion.The Company will receive a 9.4% minority interest in Invesco. The transaction, which has been approved by the Boards of Directors of both companies, is expected to close in mid-2010, subject to customary closing conditions, approval by the funds boards of directors and their shareholders and regulatory approvals. Common Dividend. On October21, 2009, the Company announced that its Board of Directors declared a quarterly dividend per common share of $0.05. The dividend is payable on November13, 2009 to common shareholders of record on October30, 2009. The Company has updated its subsequent events disclosure through November 6, 2009, the filing date of this Form 10-Q Report.

Document Information

Document Information
	9 Months Ended Sep. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-30

Entity Information

Entity Information (USD $)
	9 Months Ended Sep. 30, 2009	Oct. 31, 2009
Entity [Text Block]
Trading Symbol	MS
Entity Registrant Name	MORGAN STANLEY
Entity Central Index Key	0000895421
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,359,433,369