If Putin can't trade East Ukraine for the West's recognition of Crimea, he will invade it further

One does not not have to look any further than the logic algorithm in Putin's moves so far.
The Russian economy has entered into a tailspin - suffice to look at the figures for the first quarter of 2015 - with little chance for the Russian government to regain control, reverse the tide and  contemplate recovery.
The regions are on their own with enormous budget deficits and subsidies lagging more and more behind. Replacing governors would deflect attention for a while but not for long.
Chechnya is back on center stage with central budget subsidies at lower level and tensions on a broader front. Kadyrov's openly challenging and blackmailing central authorities. Some call for Russia's cessation from Chechnya as the only way to hold the rest of the country together.
All these indicators are a sign that Putin's economic power base is rapidly eroding. Not his grip on power. Yet.
Lavrov's short lived Sochi staged detente with Secretary Kerry was the last attempt to play the virtual card of East Ukraine and trade abstinence for sanctions relief plus tacit acceptance of Crimea's "reintegration'' into Russia. The attempt failed.
Putin's last chance to save face and claim "victory'' is to raise the stakes radically in a military intervention in the East of Ukraine and bet on the reluctance of the Europeans to fight for Ukraine.
Last but not least - the Russian President knows pretty well he is unable to sustain the current pace of military spending and would blink first in a lasting confrontation with the West over Ukraine. In Georgia it was the Russian troops in an advance mode that forced the West to the negotiation table.
He has to move now and in a decisive manner or step back.
He will try to present the West with the imminence of unleashing his military power in Ukraine and then trade diplomatically from a position of strength. If nothing else he could claim reintegrating the lost lands back to Russia - adding parts of Ukraine to the long list of frozen conflicts with the latter formally joining the Motherland.
Then play with the nuclear power privilege.
The classified facts of military losses in peaceful time is a clumsy attempt to prepare for the worst case scenario and serve one ''subtle" message to the West: it  will be either on his terms or no deal at all.