It was the news the markets had been waiting for -- hallelujah, the banks are back!

With the preannouncement of stellar earnings from Wells Fargo (NYSE: WFC), financial stocks from Bank of America (NYSE: BAC) to Goldman Sachs (NYSE: GS) soared. It's a good thing, too; with the list of too-big-to-fail companies growing fast, we can only afford so many bailouts.

But while the gains had my portfolio feeling good -- since I own a few financial shares myself -- I couldn't help but feel just a bit skeptical while the rest of the market drooled on itself and rolled around in confetti. Let's examine three reasons why I'm not ready to go bonkers over bank stocks quite yet.

1. The castrated capital markets
We can blame any number of factors for contributing to our current financial crisis, but the capital-markets divisions of the major banks and brokers have to be near the top of the list. These business groups were responsible for the structuring, pricing, and trading in all kinds of mortgage- and other asset-backed securities. They also played central roles in the downfall of venerable firms such as Bear Stearns and Lehman Brothers as well as the massive losses at others like Citigroup (NYSE: C) and UBS .

An interesting question to ponder as we look ahead to the future for banks' bottom lines is how much of the capital-markets moola will continue to flow. Back in 2006, corporate and investment banking made up roughly 30% of Bank of America's revenue, and about a third of its profit. A third of Citigroup's 2006 net income came from the same division. While this business may not disappear totally, it seems unlikely to regain the levels at the heyday. But then again, supporters of the Glass-Steagall Act are grumbling that perhaps this sort of operation never should have been part of a deposit-taking bank.

The bank du jour, Wells Fargo, never relied nearly as heavily on investment banking for its results, so we probably shouldn't be so surprised that it's faring better than the others. Even so, Bloomberg's coverage of Wells Fargo's results noted that the bank benefitted from trading in Wachovia's capital markets division -- a division that Wells Fargo is shrinking. So some of what we saw in Wells' bottom line may not make a repeat performance.

2) Exit strategy for low rates
Berkshire Hathaway 's (NYSE: BRK-A)(NYSE: BRK-B) Warren Buffett said not all that long ago that he liked the outlook for banks because "The banks are getting their money very cheaply, deposits are coming in, spreads have never been wider, all the new business they're doing is terrific." It makes perfect sense: Borrow for next to nothing, lend it back out at moderate rates, and you've got yourself a pretty nice business.

Of course, Buffett also referred to the government's ongoing actions as a war on the financial crisis. If that's the case, I wonder whether the government has an exit strategy for this particular conflict.

Let's think about it for a moment. Besides dumping lots of money into struggling banks, the government ally of The Federal Reserve has been holding rates down to near zero levels. As noted above, this is great for banks, because of the spread they can get while still lending at low rates. And those low rates attract more customers -- it sounds like much of Wells Fargo's lending activity has been in refinancing transactions. Housing prices are also inversely related to mortgage rates, so even though prices are under pressure from oversupply, sub-5% rates are helping to buoy them. Continued...