"We used to love to copy," says Carla Cando, the designer and owner of a men's label and boutique called Spina. Her studio, accessed by a heavy, chicly rusted door, sits across the street from Ølsen, and as we leave after our coffee, she stops in the garden to chat with friends, colleagues, and competitors. There they are: the members of the city's new creative class. They are young, educated, often beautiful, unafraid to wear sexy, skimpy clothes, eager to work hard. On any given day in Ølsen's garden—with its redwood patio furniture and sound track that sounds like The Strokes in Spanish—you're likely to see in motion the people who are redefining the city. But the true sound track of the neighborhood is the noise of construction: the hum of a buzz saw, the peck of a hammer upon the head of a nail. The sounds of change, of the neighborhood's future. I realize this as I'm walking down Calle Humboldt, a cross street in Palermo Hollywood that a few years from now I won't recognize. I'm picking my way around the construction sites that creep into the street. It is late morning on a clear spring day, the sun pitiless between the shade trees. A dog walker is leading a dozen pooches on a stroll. He has to keep guiding the pack into the street, navigating his way around the plywood walls that advertise future condo towers, each trying to outdo the other with computer-generated images of rooftop pools. It is then that I hear the sounds of Palermo Viejo: the call of the construction crane overwhelms the dog walker's warning to his hounds to be careful of the cars.

When I ask people here to describe the local aesthetic, the word I hear most often is capricho. Capricious, of course, has two definitions: one meaning whimsical or fanciful; the other—a more negative connotation—impulsive, mutable, fleeting. In terms of this new generation of designers and creators, the first definition is the more accurate. But the second is also worth remembering: This is a country, after all, whose fortunes have turned so suddenly, and so often, that its people are most comfortable expecting the worst from the future. Joydeep Mukherji, from Standard & Poor's, reminds me that over the last century Argentina has experienced one year of recession for every two years of economic growth. Chart those numbers on a graph and the peaks and valleys would make anyone queasy. "People in Argentina are either euphoric or depressed," he says. "They don't know slow, steady growth."

There is probably no one in Buenos Aires who more grandly exemplifies the first meaning of capricho, and whose outlook more boldly defies the second, than the hotelier Alan Faena. Two years ago, he opened the Faena Hotel & Universe in a restored granary in the dockland district of Puerto Madero, near San Telmo. His goal was to create a destination—not just a bed to sleep in but an experience, whether it was lounging on a blood-red chaise by the pool, or eating in the unicorn-themed restaurant El Bistro, or seeing a postmodern tango show in the cabaret. Faena says he wanted the hotel "to show Buenos Aires in a language that everyone could understand," and he rejected seven designs before settling on Philippe Starck's red-and-black bordello-inflected theme. Here, last century's Buenos Aires has been reimagined as a dream of its future. "Every part of the hotel represents part of Buenos Aires's history," he says. "The restaurant El Mercado represents the old cantinas, the cabaret, the old nightlife and tango. I wanted to use the richness of our history to re-create the future of Buenos Aires."