Seems like Bear Stearns (NYSE:BSC) picked the right day to announce earnings.

Goldman Sachs (NYSE:GS) and Lehman Brothers (NYSE:LEH) preceded them with quarters that really were no worse than "all right" and got slapped around by moody markets. Of course, Bear Stearns did a little better than all right this time out.

Revenue rose more than 33% this quarter (and was up more than 14% sequentially) and topped out at nearly $2.5 billion. While the clearing and wealth management business actually didn't do all that great, capital markets was exceptionally strong, led by very good results in its fixed income business.

The wealth management business, though, had a rough go of it. While assets under management climbed nicely (up about 20%), lower performance fees from hedge funds thumped the results from asset management, and growth in private client services couldn't compensate.

Since I've been pretty positive on companies like Bear Stearns and Goldman Sachs, let me take the opposite approach just for kicks. In other words, let's look at some of what could go wrong for the sector and make today's growth difficult to sustain.

It seems that competition for better trade execution and better service in prime brokerage is all but inevitable. And that's going to pressure margins -- both from lower revenue (assuming that trading costs continue to decline) and higher expenses (technology and personnel investments to keep up with the Joneses).

It's also probably true that we're heading toward another big scandal or blowup in something. Junk bonds blew up, tax shelters blew up, and various other derivative types have blown up at one point or another. And with banks racing each other to offer increasingly exotic instruments, eventually somebody's going to screw up. The only question is how much it'll cost.

All that said, I still like Bear Stearns as a company, although I'm no longer so wildly enthusiastic about the stock. Simply put, there are plenty of bargains now in the wake of the recent market declines, and that's where I'm hunting for new ideas.

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Fool contributor Stephen Simpson but has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).