The 25-year-old striker, who joined Liverpool in a £16 million deal in 2014, is currently on loan at AC Milan after scoring just four goals in 28 appearances in his first season at Anfield.
And when asked who is Liverpool’s worst-ever signing in a Q&A with the Daily Mail, Carragher replied: “There's been a few. El Hadji Diouf has got to be up there.
“Alberto Aquilani would have to be up there as well. We spent a lot of money on him. He was signed injured, he left injured and I can't remember him not being injured.
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“I can't believe we signed Mario Balotelli! The thing with Balotelli is everyone always says it's the off-the-field antics, but I wouldn't care if he was doing it on the pitch. People tell me he's got talent but I can't remember him having a good game.
“I’m praying with all the money in the Chinese Super League that someone is going to buy him after his loan. I don't think anyone in the Premier League will take him. He has to be No. 1 with Aquilani and Diouf.”