In the following example, we simply insert a text. Remember that the x and y scale is from 0 to 1:

>>>from pylab import *
>>>x = [0,1,2]
>>>y = [2,4,6]
>>>plot(x,y)
>>>figtext(0.2, 0.7, 'North & West')
>>>figtext(0.7, 0.2, 'East & South')
>>>show()

The corresponding output graph is given as follows:

Let's make it more complex. From the National Bureau of Economic Research web page at http://www.nber.org/cycles.html, we can find the following table showing the business cycle in the past two decades: