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CORRESP
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Correspondence

 1585 Broadway

 New York, New York
10036

CONFIDENTIAL TREATMENT OF CERTAIN DESIGNATED PORTIONS OF THIS LETTER HAS BEEN REQUESTED BY MORGAN STANLEY. SUCH CONFIDENTIAL PORTIONS HAVE BEEN OMITTED, AS INDICATED BY [*] IN THE TEXT,
AND SUBMITTED TO THE COMMISSION.

 February 1, 2008

 By U.S. Mail & Facsimile to 202-772-9368

 Mr. John Hartz

 Senior Assistant Chief Accountant

 Division of Corporation Finance

 Securities and Exchange Commission

 100 F. Street, N.E.

 Mail Stop 4561

 Washington, DC 20549

Re:

Form 10-K for Fiscal Year Ended November 30, 2006

Form 10-Q for the Fiscal Quarter Ended February 28, 2007

File No. 001-11758

 Dear Mr. Hartz:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of January 3, 2008, concerning its Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended November 30, 2006 and Quarterly Report
on Form 10-Q (“Form 10-Q”) for the fiscal quarter ended February 28, 2007. For your convenience, we have restated your comments below.

 Form 10-K for the year ended November 30, 2006

 Note 4. Collateralized and Securitization Transactions, page 126

1.
We have reviewed your response to prior comment 1 in our letter dated August 30, 2007 and appreciate the detailed information you have provided. Please address the following
comments with regards to your subprime lending:

•

 Please reconcile and explain the difference between the amount of your subprime residential mortgage loans at August 31, 2007 that is included in your
response C to prior comment 1 to the $12.3 billion amount presented in your subprime analysis for 2007 that was included in your response and also included in your Form 8-K filed November 7, 2007. For example, explain how your trading positions
in subprime related securities and derivatives are reflected in this table.

 Response A:

 The Company’s prior response C was limited to quantifying the Company’s U.S. subprime whole loan positions. The $12.3 billion amount quantified in the
Company’s Form 8-K filed on November 7, 2007 (“Form 8-K”) includes the statement of financial condition net carrying value, as of August 31, 2007, of all the Company’s U.S. subprime trading exposures, which includes
derivatives and securities in addition to whole loan positions.

 The [*] carrying value of U.S. subprime mortgage loans as of August 31, 2007 referred
to in prior response C is reflected in Financial instruments owned – Corporate and other debt on the Company’s statement of financial condition. The reconciliation of this [*] amount to the August 31, 2007 $12.3 billion net
statement of financial condition carrying value of all U.S. subprime trading exposures disclosed in the Form 8-K is as follows (in $ billions):

 Carrying value of U.S. subprime mortgage loans per earlier Response C

[*]

 Less: Loans related to on-balance sheet securitizations (a)

[*]

 Carrying value of U.S. subprime mortgage loans per table in Form 8-K

2.9

 Net carrying value of U.S. subprime related securities and derivatives per Form 8-K:

 Super Senior Mezzanine credit default swaps

$
(1.8
)

 ABS CDO CDS

1.1

 ABS CDO Bonds

1.6

 Total Rate of Return Swaps

0.1

 ABS Bonds

4.2

 ABS CDS

4.2

 Total net carrying value of U.S. subprime related securities and derivatives

9.4

 Total net carrying value of U.S. subprime trading exposures per Form 8-K

$
 12.3

 2

(a)
This [*] billion amount relates to subprime mortgage loans transferred in securitizations accounted for as secured borrowings within the Company’s statement of financial
condition based on an analysis of the sale criteria in Statement of Accounting Standards No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. The Company does not include such loans in
its U.S. subprime trading exposure disclosures as such loans have been legally transferred into securitization trusts and the liabilities issued by these trusts do not have recourse to the general credit of the Company.

 As can be seen in the above reconciliation, the Company’s exposure to the U.S. subprime market is primarily related to non-whole loan positions, such as derivatives
and securities. Indeed, the majority of the Company’s U.S. subprime exposure is related to an unfavorable subprime mortgage-related trading strategy, which is discussed further in Response E.

•

 For each amount quantified in responses C—K, please reconcile these amounts to amounts in your statement of financial position at August 31, 2007 and
provide explanations for any material differences.

 Response B:

 The following are the reconciliations requested:

 Prior response C – Subprime loans: The [*] carrying value of
U.S. subprime mortgage loans as of August 31, 2007 is reflected in the August 31, 2007 Financial instruments owned – Corporate and other debt balance of $160.0 billion on the Company’s statement of financial condition. The
Company carries these loans at fair value. Accordingly, the unpaid principal amount of [*] related to U.S. subprime mortgage loans as of August 31, 2007, which is also discussed in prior response C, is reflected on the statement of financial
condition at the [*] carrying value. Although the Company carries such loans at fair value, the Company provided the unpaid principal balance in its prior response C in connection with providing a breakdown of loans by FICO score. The Company tracks
such FICO category information only by unpaid principal balance, not fair value.

 Prior response D – Non-performing loans: The [*] carrying
value of non-performing U.S. subprime mortgage loans as of August 31, 2007 is a subset of the [*] carrying value of U.S. subprime mortgage loans discussed in prior response C. Accordingly, this amount is reflected in Financial instruments
owned-Corporate and other debt on the statement of financial condition. As mentioned previously, the Company carries such loans at fair value. Therefore, the unpaid principal amount of [*] related to non-performing U.S. subprime mortgage loans
as of August 31, 2007 is reflected on the statement of financial condition at its [*] carrying value.

 3

 Prior response E- Retained interests: The [*] carrying value of retained interests in U.S. subprime residential
mortgage loans as of August 31, 2007 is reflected in the August 31, 2007 Financial instruments owned – Corporate and other debt balance of $160.0 billion on the Company’s statement of financial condition. Note that the [*]
carrying value of retained interests is a subset of the $4.2 billion in ABS Bonds, which is reflected in the $9.4 billion total net carrying value of all trading investments in U.S. subprime related securities and derivatives as of August 31,
2007.

 Prior response F – Investments in securities backed by subprime mortgages: The Company’s trading investments in U.S. subprime
related securities and derivatives, excluding loans, totaled $9.4 billion as of August 31, 2007. This $9.4 billion balance is detailed in the reconciliation provided in Response A of this letter, and is derived from the Form 8-K. Please note
that in our prior response F, we provided October 31, 2007 numbers and not August 31, 2007 amounts. Given your request for reconciliations of the August balance sheet amounts, we are reconciling the August 31, 2007 amount.

The $9.4 billion subprime trading securities and derivatives net carrying value as of August 31, 2007, as detailed in Response A, is reflected as follows in the
Company’s statement of financial condition: Financial instruments owned of [*] and Financial instruments sold, not yet purchased of [*]. Such balance sheet amounts reflect counterparty netting for derivatives to the extent that
there are positions with the same counterparty that are subprime related; they do not reflect counterparty netting to the extent there are positions with the same counterparty that are not subprime-related. In addition, such balance sheet amounts do
not reflect any netting of cash collateral against these positions.

 The [*] carrying value of U.S. subprime related securities held in the available for
sale investment portfolios of the Company’s bank subsidiaries as of August 31, 2007 is reflected in the August 31, 2007 Other investments balance of $12.7 billion on the Company’s statement of financial condition.

 Prior response G – Delinquencies in retained securitized subprime residential mortgages: The Company’s response on this matter discussed
a statistical measure. Accordingly, there are no amounts in this prior response to reconcile to the statement of financial condition.

 Prior response H
– Write-offs / impairments related to retained interests in subprime residential mortgages: The Company’s response on this matter discussed income statement measures. Accordingly, there are no amounts in this prior response to
reconcile to the statement of financial condition at August 31, 2007.

 Prior response I – Involvement with special purpose entities: The
Company’s response on this matter was a qualitative discussion of its involvement with special purpose entities. Accordingly, there are no amounts in this prior response to reconcile to the statement of financial condition at August 31,
2007.

 4

 Prior response J – Potential repurchase commitments you have regarding subprime residential mortgages: The
Company’s response on this matter discussed the nature of its repurchase commitment obligations and did not quantify any balance sheet measures. Accordingly, there are no amounts in this prior response to reconcile to the statement of financial
condition at August 31, 2007.

 Prior response K – Loans to, commitments in, or investments in subprime lenders: The [*] in loans made to
U.S. subprime lenders under warehouse lending agreements as of August 31, 2007 is reflected in the August 31, 2007 Securities purchased under agreements to resell balance of $176.9 billion on the Company’s statement of
financial condition. Such lending arrangements are generally executed under master repurchase agreements.

 The unrealized loss associated with derivatives
entered into with a third party conduit that provides warehouse financing to subprime lenders, which is presented in Financial instruments sold, not yet purchased, was immaterial as of August 31, 2007.

 There were no subprime mortgage loan purchase commitments as of August 31, 2007. Accordingly, there is no unrealized gain or loss amount related to subprime
mortgage loan purchase commitments to reconcile to the statement of financial condition as of August 31, 2007.

•

 We note your risk management policies discussed in your response and your disclosure in Item 7A of your Form 10-K for 2006. Please ensure that your
Item 7A disclosures in future filings include a more detailed discussion of your origination policies, specifically any changes in eligibility requirements, and discusses in detail disposition strategies and how you monitor your net exposure
when evaluating risks associated with your trading and other portfolios.

 Response C:

 The Company continually evaluates the appropriateness and completeness of its Item 7A disclosures, and modifies and enhances these disclosures as appropriate. In
making such an evaluation, the Company considers the materiality of its various businesses, and the extent to which the Company’s various businesses contribute to the Company’s risk profile. As discussed below in Response E, the
Company’s main U.S. subprime exposures are the result of an unfavorable subprime mortgage-related trading strategy, and not as the result of whole loan positions generated by origination activity.

 [*]

 5

 [*]

 With respect to the
monitoring of net exposure, the Company has noted on page 86 of its 2007 Form 10-K, as detailed in Attachment A, that net exposure is one key risk measure the Company employs to standardize the aggregation of market risk exposures across cash and
derivative products.

 The Company has added a discussion of the 2007 credit market events to its 7A disclosures on page 85 of the 2007 Form 10-K. Those
discussions, which are included in Attachment A, note that enhancements have been made to the Company’s stress test and scenario analysis as a result of these events.

•

 We note that your response has not addressed the possibility that your subprime lending business will have a material adverse impact on your condition, results
of operations or liquidity. We caution you to continue to evaluate, both on a quantitative and qualitative basis, the appropriate amount of transparent disclosures you provide regarding your subprime lending so that readers are informed about your
level of involvement in these activities.

 Response D:

 The Company has significantly expanded the discussion of its U.S. subprime related activities and exposures in its 2007 Form 10-K. The primary discussion of these activities and exposures is contained in the section
titled “Impact of Credit Market Events” which starts on page 51 and ends on page 55 of the 2007 Form 10-K and is included in Attachment B. The Company continually assesses the appropriateness and completeness of its disclosures.
Accordingly, continued disclosures of this nature will be evaluated and the appropriate amount of disclosures will be made.

•

 We note in your Form 10-Q for August 31, 2007 you disclose in the MD&A that the US economy was experiencing signs of slowing during the third quarter
2007, primarily reflecting difficult conditions in the residential real estate and credit markets and that concerns about the impact of subprime loans caused the broader credit markets to deteriorate considerably over the quarter. In light of the
economic slowing in the residential real estate and credit markets and your impairment of trading portfolio that included real estate securities, tell us how you determined that there were no decreases in fair value of your US subprime related
balance sheet exposures during the third quarter 2007.

 6

 Response E

 The
Company believes that the carrying value of its subprime balance sheet exposures as of August 31, 2007 reflected the fair value of those exposures based on the then current market conditions, and that the losses recorded in the fourth quarter
of 2007 reflected changes in market conditions that occurred during the fourth quarter.

 The Company’s third quarter 2007 results did reflect losses
on certain of its subprime positions. Those losses, which were offset by gains on other U.S. subprime positions, significantly lowered revenues in the third quarter of 2007. This decline in credit product revenues was discussed on page 58 of the
Company’s Form 10-Q for the fiscal quarter ended August 31, 2007 (“third quarter Form 10-Q”) as follows:

 Credit product
revenues decreased 54%, primarily due to lower revenues from corporate credit and structured products. Spread widening, lower liquidity and higher volatility resulted in lower origination, securitization, and trading results across most credit
product groups and also affected the performance of the Company’s hedging strategies.

 The significant losses sustained by the Company in the fourth
quarter resulted from an unfavorable subprime mortgage-related trading strategy and the continued deterioration and lack of market liquidity for subprime and other mortgage-related instruments. The valuation methodology used for these instruments
incorporated a variety of inputs, including prices observed from the execution of a limited number of trades in the marketplace; ABX and similar indices that track the performance of a series of credit default swaps based on subprime mortgages; and
other market information, including data on remittances received and updated cumulative loss data on the underlying mortgages.

 The Company’s primary
exposure to the U.S. subprime market is associated with “super senior” credit default swaps that reference synthetic asset backed security (“ABS”