It's a strange one. I think everyone knows how he has been thinking.
Ideally, he'd like to stay at Real Madrid. Realistically, for whatever reason, he knows he will have a big fight to get in the team. Based on last season he could well fight his way back into the team, but being World Cup year he does not want to take the risk. He moved to Real Madrid to win trophies but it turns out that they are in a period of transition although they have every chance of winning something this season.
Meanwhile, the club he left in order to win trophies, went on to win the Champions League! Happy for them, sad for him.
Looking at his options, he would be happy to rejoin Liverpool. He is perhaps convinced that Benitez is the man to lift Liverpool to the next level and being able to compete for winning the league and do well in Europe, fulfilling his ambition of regularly challenging for and hopefully winning trophies.
Big problem however - Liverpool don't really want-need him in their manager's opinion.
Next option - Newcastle. They desperately want him, no problem getting a game, but chances of winning anything are slim. How many trophies has Alan Shearer, the previous England no. 1 striker, won in many years at Newcastle? 0.
Other options - Man U, Chelsea, Arsenal - he would probably happily sign for any of them, as they are the 3 teams that win the league, but none of them want him.
Perhaps his agent should have sniffed about at the big clubs in Italy, or perhaps Bayern Munich, but maybe there was not any interest there.
So given all that, you might think the logical thing to do is stay at Real Madrid. Another ideal option would be a year on loan at Newcastle to make sure he gets his game before the World Cup, but Newcastle never went for that.
Overall then, it seems that he preferred a game at Newcastle, despite little chance of trophy winning, instead of battling it out at Real Madrid, where there is a good chance of trophy winning, even Champions League winning.
It is all a bit strange however given that he left Liverpool to win big trophies. Is he hoping a good season at Newcastle and a good WC will see the big clubs after him again?
Stephen