He told shareholders at the meeting that the markets are facing the most difficult conditions he's seen in 40 years.
The world's biggest banks and brokerages have reported more than $230 billion of losses and write-downs since the start of last year because of the collapse of the sub-prime mortgage market. Morgan Stanley, the second-biggest U.S. securities firm, said in a report earlier this month that turmoil in the credit markets may last an additional five to seven quarters, exceeding the Asia currency crisis and the bursting of the dot-com bubble.
To weather the slowdown, New York-based Morgan Stanley will need to maintain "a lot of liquidity,'' Mack said, so the company is only ``gingerly'' investing in distressed assets. He said the U.S. sub-prime crisis may be almost over, though European companies holding such assets will take longer to recover.