Undated (AP) _ It seems strange picking a team that has lost its last two games as the favorite in the talent-laden Big Ten. But, then, that's the way it is when dealing with Bob Knight's Indiana Hoosiers.

Forget the loss to Kansas in the NCAA regionals last season. And the one to UCLA last week in the Tip-Off Classic. Knight has the kind of talent he likes to mold into a team gradually.

''I just don't think we are capable of playing against a really good team at this point,'' Knight said after the 87-72 loss to UCLA.

Maybe not at this point. But by season's end, Knight should have the conference title in pocket with a shot at his fourth national championship.

In Calbert Cheaney, Indiana has one of the best players in the country. He is surrounded by an excellent cast that includes seniors Eric Anderson and Jamal Meeks and renowned sophomore Damon Bailey. Freshman Alan Henderson also could be a factor.

Indiana's main threat in the conference again will come from Ohio State. The two teams shared the title last season, but neither could get any farther than the round of sixteen in the NCAA.

Jimmy Jackson, the Big Ten Player of the Year, is back with the Buckeyes. Coach Randy Ayers again has the backcourt tandem of Mark Baker and Jamaal Brown but will miss bruisers Perry Carter and Treg Lee.

Former Hoosier Lawrence Funderburke joins the Buckeyes and will bear watching.

Iowa and possibly Michigan could be title contenders.

Coach Tom Davis at Iowa has everyone back from a team that reached the second round of the NCAAs before losing to eventual champion Duke.

Acie Earl, a 6-foot-10 sophomore, has developed into a shot blocking force. Wade Lookingbill rejoins Iowa after a year as a medical redshirt.

Michigan, the 1989 NCAA champion, is coming off its first losing season since 1982. But Steve Fisher has recruited an outstanding class.

The ''Fabulous Five'' include Chris Webber, Jalen Rose, Juwan Howard, Jimmy King and Ray Jackson.

''The freshmen at Michigan can play,'' Illinois coach Lou Henson said. ''Michigan has the ability to win it all.''

Despite NCAA sanctions, Illinois had an outstanding season by finishing in a third-place tie with Michigan State, last year's preseason favorite.

Henson lost leading scorer Andy Kaufmann because of academics, so he will have an all-sophomore starting lineup headed by Deon Thomas and Rennie Clemons.

Jud Heathcote, the Michigan State logician, lost Steve Smith and summed up his chances by saying ''if Mike Peplowski, Matt Steigenga, Mark Montgomery and Dwayne Stephens play like they did last year, we're not very good. If they emerge as players, we'll be okay.''

An axiom in the Big Ten is never underestimate Purdue under Gene Keady.

Keady will be without Glenn Robinson, prop 48, this season. Matt Painter, Craig Riley and Woody Austin return. Freshman Cuonzo Martin should help.

At Minnesota, Clem Haskins will have a sophomore lineup that went through growing pains last season. Players to watch are Randy Carter, Dana Jackson and Ernest Nzigamasabo.

Steve Yoder lost his entire starting lineup and will have to rebuild through reserves. But he has an outstanding freshman in Michael Finley, and Tracy Webster (prop 48) is eligible this season.

Northwestern was winless in the conference and finished last for the seventh straight season. The Wildcats should break the string with leading scorer Todd Leslie back and the development of sophomores Kevin Rankin and Pat Baldwin.

In the Big Eight, Oklahoma State under Eddie Sutton is favored. Sutton returned to his alma mater last year and led the Cowboys to a share of the title with Kansas and into the final 16 in the NCAA.

''This team potentially can be better,'' said Sutton. One reason is the return of Byron Houston. Two others are 7-foot freshman Bryant Reeves and 6-9 Randy Davis.

Kansas went all the way to the championship game before losing to Duke.

But the Jayhawks lost three starters, including Mark Randall and Mike Maddox. Coach Roy Williams has Adonis Jordan and Alonzo Jamison back plus 6-8 Ben Davis.

Oklahoma and Billy Tubbs had an offseason at 20-15 and had to settle for the NIT after eight straight NCAA appearances. The Sooners figure to contend with four starters returning, including Jeff Webster.

Missouri won its last six but couldn't play in the NCAA. The Tigers lost Doug Smith but have Anthony Peeler back.

Nebraska had a 26-8 record but will be without Rich King, its leading scorer and rebounder. Iowa State, Kansas State and Colorado will bring up the rear.

Elsewhere, DePaul is no longer an independent. Joey Meyer's Blue Demons have joined the newly created Great Midwest Conference that includes Memphis State, Cincinnati, Marquette, Alabama-Birmingham and St. Louis.

DePaul, loaded with talent but no superstar, should win it with arguments from Memphis State and Cincinnati.

There are three new coaches in the Missouri Valley Conference, but dean Rich Herrin at Southern Illinois has lots of talent including Ashraf Amaya. Wichita State could challenge the Salukis.

Xavier should repeat in the Midwestern Collegiate Conference, cut to six teams with the defection of St. Louis and Marquette to the GMC. Evansville and Dayton will battle for the important second spot since two teams will get byes in the MCC tournament.

Eastern Michigan lost five of its first six players from the team that won the Mid-American title and defeated Mississippi State and Penn State in the NCAAs. Ball State with Chandler Thompson and Ohio with Louis Geter are the top contenders.

Wisconsin-Green Bay should win the Mid-Continent and repeat its trip to the NCAA what with coach Dick Bennett's son, Tony, returning. Wright State, a newcomer to the league, will be Green Bay's chief challenger.

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