The locals say it is a bad summer here. The Argentines are still coming, coming by the thousands in cars and buses and four planes a day direct from Buenos Aires. They are renting apartments and houses and each morning are cramming the long beaches of this spectacular Atlantic peninsula.

But, says a local Uruguayan entrepreneur, waving an arm at his elegant club in dismay, "The Argentines are not spending."

There is no more plata dulce, no more "sweet money" here. This resort, hinged at the edge of the River Plate and the Atlantic Ocean on the southern Uruguayan coast and ringed with suddenly discounted apartment towers and mortgaged seaside estates, has become something of a monument to the boom and bust of Argentina's strange economy.

Buenos Aires' elite, its wealthy businessmen, its journalists, socialites and politicians, long ago made Punta del Este into an exclusive summer colony. But five years ago, when speculators and entrepreneurs were riding a miniboom of foreign loans and overvalued currency, this place was suddenly transformed.

Once a charming village of red tile and stucco cottages and miles of empty beaches, Punta del Este became a booming resort of fast deals and palos verdes, or green sticks, the slick Argentine term for a million dollars. Dozens of square, terraced towers and thousands of luxury houses and apartments opened up along the long beaches. Beachside drives were paved, golf courses and clubs multiplied, and modest Uruguayan families were offered spectacular cash sums for small lots--6,000 feet could bring $2 million.

"It was completely crazy," said Armando Sagasti, a local real estate agent. "Millions of dollars were spent without thinking, and it was cash--all the sweet money and the black money of Buenos Aires. There was nothing here but Argentines and banks and real estate agents."

Now, just as suddenly, all the cash is gone. Argentina's financial system has collapsed, its foreign debt stands at $40 billion, and 2,000 apartments built during the past five years are said to be empty here. Prices have plunged by more than half. One of the best penthouses that used to cost $350,000 now can be had for a mere $160,000. Once 220 real estate agents operated in this town of about 3,000 permanent residents; now there are fewer than 100.

The Uruguayans living here on the tourist trade or the investments of Argentines--who are said to control up to 80 percent of the capital in the area--have involuntarily been dragged through a roller coaster of property values.

"I had a small farm here that I had bought for $5,000," one Uruguayan resident said. "At the peak of the plata dulce, I sold it for 70 thousand and bought an apartment in town. Now, the apartment is only worth 15 thousand . What you gain here you lose the next summer."

Along the main street of the peninsula, mixed among the stylish cafes and pinball arcades, the infrastructure of tax shelters and capital flight survives. On every block there are banks--Argentine, American, European, and Israeli and Arab banks. There are few hotels, and none built to attract international tourists. "This is not a tourist resort," a local businessman explained. "It is a place for the rich and for the speculators."

While the speculators are gone, the rich and elite of Argentina remain. As many as 20,000 rent or own houses and apartments, and even with their country suffering one of its worst economic and political crises, they have come for a summer month--either January or February, the southern hemisphere's equivalent of the U.S. July and August.

For Argentines, the summer is a powerful social ritual. Politics, government, professional trades and much of business simply stop for two months, and the national media fix their attention on the country's summer capitals--Mar del Plata, southeast of Buenos Aires, for the middle class; Punta del Este for the elite.

This year is no different, even though Argentina is teetering near default on its foreign debt and the first democratic elections in 10 years are only eight months away. The top presidential candidates, the entire leadership of the national labor movement, the economics minister, the junta chiefs and even the president simply have moved to the beach for weeks at a time.

Buenos Aires newspapers must maintain full-time correspondents in the resorts to keep up. This year, both the economics minister and the planning minister granted formal interviews to Argentine magazines at beachside, and when foreign media reported possible Argentine plans for a new attack on the Falkland Islands, denials were issued from the government compound on the coast.

"The Argentine never renounces his comforts, no matter what may be happening," said Bernardo Neustadt, Argentina's most prominent journalist. "It is just accepted that nothing will happen in the summer. I must have talked to 100 people who said last year they just couldn't get away to Punta del Este this year. But now all of them are here."