Manchester United face an uphill battle to recover from their worst start to a season for 15 years admitted manager Sir Alex Ferguson after his side went down 1-0 to their city rivals on Sunday.
A goal by Geovanni saw former England manager Sven Goran Eriksson triumph over Ferguson and leave United in the strange position of just two points from three matches while Manchester City top the table with nine points from three matches.
"We've got ourselves in an uphill fight," confessed Ferguson, whose side dominated the match but fell short in front of goal.
"Ten years ago we could have handled it because we have always been good in the second half of the season and now we are going to have to be again.
"It would take a long time to explain it because we had enough chances but it just wasn't to be our day.
"The chances we had and the possession in the final third of the field should have been made to count but we have been very wasteful in front of goal, that's the nuts and bolts of it.
"I don't think you can even say City have been lucky simply because we had so many chances ourselves. It was our own fault because of our shortcomings in the final third of the pitch."
Ferguson revealed also that his prize capture of the summer from Bayern Munich, Owen Hargreaves, is a doubt for England's friendly with Germany at Wembley this week.
The midfielder reported feeling pain in both knees after making his Manchester United debut.
Hargreaves, signed this summer from Bayern Munich for 18 million pounds, impressed playing in a holding role in front of the United back-four and would almost certainly figure in at least part of Wednesday's clash.But having been forced to delay the introduction of the player this season while Hargreaves recovered match fitness, Sir Alex Ferguson raised doubts about Hargreaves' ability to face Germany.
"Owen is feeling very painful in his knees," the United manager said.
"It's a result of him playing his first game. He will probably report for the squad but I don't think he is ready to play for England."
Geovanni's effort was enough to bring City victory in the eagerly anticipated first meeting of Eriksson and Ferguson since the Swede returned to club football following his spell in charge of England.
But Eriksson joy at seeing his side maintain their 100 percent start to the season was tempered by an injury to Bulgarian striker Valeri Bojinov just five minutes into the game.
The former Fiorentina forward was stretchered off in obvious agony and could face a lengthy lay-off if knee ligament damage is confirmed.
"Bojinov has gone for a scan and we will have to wait and see but we think it is ligament damage," Eriksson said. "But we don't know how bad."
United were without the injured Wayne Rooney, Louis Saha and Ole Gunnar Solksjaer while Cristiano Ronaldo started a three-match ban.
And Ferguson added: "You wish you had your main strikers there of course but we didn't and you saw the evidence of that today with the number of chances and possession we had. We still should have won the match.
"I'm obviously disappointed, there's no question about that, but the performance was outstanding. I don't know what the possession figures were and don't know how many corners we had but it all comes down to taking your chances and we certainly should have sewn the game up early on."
Eriksson admitted his return to club football couldn't have been better and singled out defender Micah Richards for praise after a robust defensive display.
He said: "Of course it's very nice to beat the champions but three games and three clean sheets, I must be happy with that. And I am, very happy.
"Richard Dunne and Micah Richards were absolutely fantastic, as was the rest of the back-four. It's important to remember Micah is 19 and to have a defender that strong and that quick. That is a combination that is very rare.
"I like the situation. It's my first time in the Premiership and we are a young, new team. This was a big test and we showed we can stand up to the champions."