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Fannie Mae and Freddie Mac shares have been falling steadily amid doubts about two companies' capital position. A government plan, announced Sunday, has done little to alleviate these concerns. William Ackman, managing partner, Pershing Square Capital Management, a well-known activist shareholder, has a plan to save the government sponsored entities by restructuring their debt and equity. He shared that plan on CNBC's "Squawk Box." He provided these slides to help explain the plan. For brevity, he said he is only using Fannie Mae, but the same logic applies to Freddie Mac.

Disclosure: Ackman has a short position in both the junior debt and the equity of both Fannie Mae and Freddie Mac. He has no position in the senior debt of the two mortgage lenders.