Michigan is NOT bad.
Michigan just doesn't pass the "eye test"
9 weeks in and Michigan is starting it's third QB this season, a RS freshman no less.
The Mich offense ranks well below average in all categories and Michigan is sitting in fourth in the B1G east and got man handled by PSU so no surprises with the rankings here.
The flaw isn't with Michigan though, the flaw is with the comittee's "eye test". IMO there will always be an issue with the rankings until the playoffs are expanded. 5 power conferences with only 4 spots is not a recipe for success. Deserving and Best aren't always the same and when you rely on an "eye test" metric to figure it out you'll rarely get it right. O$U is prime pro and con example. They get in as a #4 seed, knock off the #1 seed Bama and win the NC in the first year. On the flip side they jump the B1G champ PSU and get shutout against eventual NC Clemson last year.
If defenses win championships, as every LOVES to point out, then Michigan should very well be ranked MUCH MUCH higher. Until they get a quality win against Wisc or O$U they likely won't pass the "eye test."
IMO even if Michigan wins at Wisc and beats O$U and then beats Wisc again in a B1G championship game they still won't get in because their opponents and wins against opponents won't pass the all mighty "eye test."
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Sometimes people standing on third base think they hit a triple, but they didn't - Jim Harbaugh