Ah, back to the naming convention that we all got comfortable with. I looked ahead and - no spoilers - that pattern remains through the rest of the season. Maybe season 2 will be named after Beatles songs.
We start the episode, like many of them this season, in a flashback. This is taking place in the relatively recent past, 3-6 months earlier. This episode jumps back and forth between the present day (Mike being questioned with Saul by the Philly cops) and into the past, either in Mike's last days in Philly or his first days in Albuquerque. It's pretty obvious in the show which is which due to a matrix-like blue filter. I think they have used this filter in previous episodes' flashbacks (chuck bailing out jimmy maybe?), so it's probably no big revelation.
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This episode's story is told like an old cop drama. He's got a tough exterior, made a few mistakes, but is generally a good guy. It's the tale of Mike Ehrmantraut, which might not be terribly relevant to people who have only seen BCS, but for those of us who watched all of Breaking Bad, this was some back story that was a looong time coming.
Back to present day and Mike is in an interrogation room and won't say anything until his lawyer gets there, now, apparently, Jimmy McGill. Mike has a plan, as he always does, and tries to get Jimmy to help him steal the detective's notebook. Jimmy instantly rejects the idea - he's trying to be on the straight and narrow, but of course goes along with the plan when push comes to shove. During this interview, we're finally given some insight into things that actually happened in Philadelphia.
Mike gets the notebook and gets a good look at what the cops have on him (interesting side note - the AMC story sync has some great images of the notebook so you can see what they have) and realizes that his daughter-in-law called the Philly detectives after Fenske and Hoffman were killed. She thought there could be a connection, and presumably, told them that Mike was now in Albuquerque. Mike goes to confront Stacey about her calling the cops, and while he winds up admitting the phone call Matt had that she was worried about was actually with Mike, you don't get much else. Mike just stubbornly says "My boy wasn't dirty".
We move into a flashback as smooth as silk, and Mike is walking down the street back in Philly. He niftily breaks into a police car and proceeds into the bar and Mike appears to be really deep in his cups when we see Fenske and Hoffman for the first time. Mike's already put his plan into action (breaking into the car to plant a gun) but it really gets into motion when he walks up to them and tells them that he knows it was them (who killed Matty).
The plan comes together perfectly (as most of his plans in BB did), and it's great watching it for a second time, seeing how everything falls exactly into place. Getting picked up by the cops after the bar closed, giving them the ringer gun, waiting until they did decide to kill him.
Back in the present, Mike is back at Stacey's house and ready to pour his heart out. This is one of the best scenes that Jonathan Banks has had in both shows, and showcases his talent - he's not just grumpy and rough on the exterior. Mike explains everything that happened around Mikey's death, "breaking his boy" and finishes it with "you know what happened. the question is - can you live with it?"