By Jeff Reeves, InvestorPlace.com

This morning we saw a seemingly impressive earnings report from Bank of America (BAC). Revenue was up. Profits beat expectations. Good news, right?

Not so much. A closer look at the numbers shows some  fuzzy math that only a contortionist could feel comfortable with. The real bottom line is that Bank of America earnings are still ugly and that the entire financial sector remains a very risky bet.

Here are the headline numbers: Bank of America earnings rose by $6.2 billion, or 56 cents per share. Revenue was up 6% at $28.8 billion. Wall Street was expecting EPS of 20 cents on revenue of $25.95 billion, so it all looks pretty good on paper.

But the latest quarter's earnings figure included $4.5 billion in "fair value adjustments." In short, this means a bank can decide how much its assets and liabilities are worth on its own. For instance, a few days earlier, both JPMorgan (JPM) and Citigroup (C) said the spread between their debt and U.S. Treasurys led to "profits."

No business actually transpired -- other than a different number being used to calculate the Excel spreadsheet in accounting. Theoretically, as their debt "loses value," it is cheaper for banks to pay it off, resulting in a paper gain.

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Confused? You should be, because an accounting move that conjures billions out of thin air seems fishy to many investors. Interested parties can read an excellent, detailed report on the accounting practices from Reuters here. Unfortunately, we have other fuzzy math to discuss in regards to B of A and have to keep moving.

Next up is is the pretax gain of $3.6 billion from Bank of America's sale of shares in China Construction Bank. Obviously a huge one-time gain like this cannot be re-created. And as I wrote when the deal went down, the sale damages the future of BAC lending in China,  a crucial emerging market, considering how poor the credit market is in the U.S. and Europe right now.

Then there's the loss of $2.2 billion related to private equity and strategic investments. Investors had a rough third quarter, too, but $2.2 billion seems a bit ugly for a supposed Wall Street icon.

To top it off, all this comes after a Monday report from BofA's credit card division that indicated an increase in late customer payments for September, the first such uptick in a year. Additionally, Bank of America still has one of the highest credit card default rates in the industry

The squints on Wall Street can fight over the finer details of this quarter's earnings at B of A. But the bottom line is that nobody knows how bad things really are. One-time charges, goofy "mark to market" tricks juicing numbers -- these are simply not playing fair.

Worse, what we do know about lingering problems with consumer lending means an even darker picture for financial stocks.

Consider these other earnings reports:

J.P. Morgan Chase (JPM) saw third-quarter earnings slip 3.5%, thanks to higher expenses. On the revenue front, things are going nowhere fast -- 2009 and 2010 full-year revenue totals were almost identical. As for 2011, JPM is looking at a slight decline in revenue.

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As you can see, Bank of America earnings are just part of a troubling industrywide trend.

True, financial stocks have a tough row to hoe right now. Persistent troubles with bad mortgages and bad debt are eating away the bottom line. Fewer qualified borrowers are out there because of the tough job market and black marks on credit reports due to other economic hardships Americans have had to endure.

But that's all academic. Aside from the fact that financial stocks willfully created the subprime-mortgage bubble, Wall Street isn't much interested in excuses. Investors want to identify profits and risks – nothing more.

Right now there are way too many risks. And worse, it's impossible to truly identify the profits and risks when banks can create billions of dollars out of thin air.

Jeff Reeves is the editor of InvestorPlace.com. Write him at editor@investorplace​.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. As of this writing, he did not own a position in any of the aforementioned stocks.

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