The former midfielder is not impressed by the decision to sell Jonjo Shelvey to Newcastle United.
The Swans made a flying start to the season under Garry Monk, but fell away and went on a poor run of form that ultimately cost the former defender his job at the Liberty Stadium.
They are now sitting 18th in the table, in the relegation zone, after Newcastle managed to beat West Ham 2-1 on Saturday afternoon.
Things are currently looking bleak for the Swans then and Merson says he makes them favourites to go down alongside relegation favourites Aston Villa.
“Who sells one of your best players, who’s an England international, to one of your relegation rivals?” he told Soccer Saturday.
“Surely you let him go for £3million less to a team that’s in the middle of the table. It is absolutely mind-blowing.”
“Until they sort themselves out, I make these favourites to go down after Aston Villa, I really do at the moment.”
A big problem that could see Swansea go down is their lack of a full-time manager at present.
The decision to sack Monk earlier in the campaign has looked a poor one so far, with the club having failed to name a long-term successor since.
Instead, Alan Curtis has been placed in temporary charge and is set to stay in the role until the end of the season, adding an element of uncertainty to the situation that a relegation threatened club could do without.