IMO Roy Hodgson is a very good manager. He has a track record in a number of countries. I'm delighted for him that he has been given a job at one of the 'big' English clubs. He should have an understanding of how hard it will be and that realistically Gerrard and Torres will go. He will not have signed without having his eyes wide open. The financial situation is a huge mess with no short term end in sight - I doubt new backing will come in before this transfer window closes.
He built a team at Fulham and will do so at Liverpool. They will be hard to beat but will not be the force they have been.
Liverpool have made a good appointment. It will not be down to Hodgson that they fail to qualify for Europe - others around them like Everton & Villa will just be too good for them.
I am confident that City will continue to move away from Liverpool and challenge for the top honours.