Is the second season of Black Butler supposed to be set before the first one?

I'm so confused. Is the second season supposed to be like a prelude to the first one, because Ceil is talking about Madame Red whom died in the first season. Also, Lao (The Chinamen) is still alive and he died also in the first season. I'm only a few episodes in, but I'm so confused. Also, he doesn't seem to know Grelle when he sees him and they were clearly knowing each other in the first season.