Jim Cramer thinks this company is the 'biggest problem in the world'

On Monday's episode of CNBC's Squawk on the Street, Jim Cramer called Brazilian oil company Petrobras "the biggest problem in the world."

"I remember Russia," Cramer told his colleague David Faber. "I didn't think Russia could have an impact... next thing you know I was on TV talking about Russia and I felt very ill-equipped.

"I don't want to feel ill-equipped talking about Petrobras this time. This is the number one problem in the world right because it has so much debt, Brazil the 8th largest economy, and people aren't talking about it."

Petrobras, which is half-owned by the Brazilian state, has seen its share price fall almost 40% year to date. On top of that, Cramer pointed out, it's the most debt laden company in the world and the company's 10-year bonds are trading with a 10.5% yield. Cramer called that "unsustainable."

In May, Cramer said the company was back from the dead.

"It's making a comeback but they do report Friday, and we've got to see what they really do," he said. "I've got to tell you, this is a company that's back from the dead... I don't want to be there, but I understand that I didn't call the bottom in this thing and I can understand why people want to speculate in it."

In November 2012, short-seller Jim Chanos told a conference room of investors in London that state management was suffocating Petrobras' profitability. Basically, the company is drilling expensive oil fields with expensive machinery and hiring workers while the government suppresses oil prices.

But that's hardly the worst of it.

Petrobras' stock has collapsed over 76% in the last year, and become a national scandal in Brazil. In a sting called "Operation Car Wash," agents arrested dozens of businessmen for accepting and offering kickbacks for doing business with Petrobras.

Now the scandal has crept up to the highest level of the government's ruling party - the party that brought Brazil into its glory days around a decade ago. Brazil's President Dilma Rousseff once chaired the company's board, and now her approval rating among her constituents is sitting around 7%.

Also in the last year, inflation in Brazil has hit around 10%, its currency has lost a quarter of its value, and citizens are taking to the streets demanding regime change. Some have even called for the military to retake the power it had from the 1960s-1980s.

So yes, it's a problem.