I'm no fan of bank stocks, and I haven't been silent with that opinion.

And while bank stocks have exploded, and I mean exploded, in recent weeks, I'm still held down with pessimism. Quite a bit of it. Let me explain.

First, let's not be shy when talking about how much these stocks have rebounded. It's been huge. Have a look:

Bank

Return Since March 5

Citigroup (NYSE:C)

202%

Bank of America
(NYSE:BAC)

142%

Wells Fargo (NYSE:WFC)

112%

JPMorgan Chase (NYSE:JPM)

63%

American Express (NYSE:AXP)

36%

Goldman Sachs (NYSE:GS)

29%

Morgan Stanley (NYSE:MS)

35%

Yep, we're talking about multi-baggers here.

And why not? Citigroup got the party started by telling the world it's been profitable in 2009! Then Warren Buffett chimed in, saying "banks have the earning power which has never been better on new business going out of this to build capital positions even if they pay low dividends which they're starting to do now."

Shouldn't that be enough to ignite a good, solid rally?

For the time being, and for some banks, yes. As Buffett pointed out, banks' cost of capital is basically nothing. They can borrow money from the Fed at 0% and lend it out at 5%, 10%, 12%, whatever. Provided they're not lending money to Bernie Madoff or Robert Mugabe, they'll make money.

Two important caveats, though: One, the amount of capital banks will be able to stockpile through operating profits won't come even remotely close to covering losses on existing assets in the coming years. For many banks, we're talking about potentially hundreds of billions of dollars in estimated losses, and billions more to rebuild capital levels.

Second, even Buffett's enthusiasm came with a warning: "The only worry in that is the government will force [banks] to sell shares at some terribly low price."

But that's exactly what the government is doing. Citigroup just handed over 36% of itself to Uncle Sam, and I've shown how Bank of America could easily be next in line. Just yesterday, bank analyst Meredith Whitney told Charlie Rose, "It is just a question of not if the banks need to raise capital, it's when."

No one has a clue, but I think it's rational to assume that a few big banks will ultimately will die, and the remaining ones will look like utilities -- onerously regulated. Problem is, this business and government actions are so opaque that you won't know who the winners are until after the fact, and even then, the industry might look extremely different going forward, making it impossible to value 'em in today's environment.

Maybe you feel differently? Feel free to chime in with your thoughts and comments below.

For further Foolishness:

Fool contributor Morgan Housel doesn’t own shares in any of the companies mentioned in this article. JPMorgan Chase is a former Motley Fool Income Investor selection. American Express is a Motley Fool Inside Value pick. The Fool owns shares of American Express. The Fool has a disclosure policy.