Morgan Stanley (NYSE: MS), the nation's second largest investment bank, posted its second quarter numbers today. As expected, the firm saw a hefty drop in quarterly profit. The ongoing credit crisis hit the bank hard and resulted in a 61% decline in quarterly profit, a number that could have been much worse.

The reason why I say that the situation could have been much worse is that the company benefited from the sale of around $1.4 billion in assets during the quarter. This contributed to a profit of 95 cents per share for the quarter.

The 95 cents per share was actually above Wall Street estimates, as analysts had been expecting to see the company show earnings for the quarter of 92 cents per share. But that has not prevented traders from pushing the stock lower in early morning trading. As of 11:00 am, we are seeing shares trading down 5% to $38.49.

During the quarter, Morgan Stanley was hit with $436 million in losses that resulted from mortgage-related trades, and another $519 million worth of losses that stemmed from leveraged loans, a definite sign that the credit crisis has not run its course just yet as some had been hoping.

With today's release from Morgan Stanley, we have now seen the last period earnings numbers from all of the big three investment banks. Earlier this week, Lehman Brothers (NYSE: LEH) stunned Wall Street with its $2.8 billion loss, and today Goldman Sachs (NYSE: GS) announced that its quarterly profit was off by 11%, but still above Wall Street estimates. Goldman is trading in the green today, with traders pushing that stock up a mere 0.2%.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.