Brian Dunavant wrote on 13.01.2015 22:33:
What issue are you having?  I'd imagine you have a race condition on
the insert into hometowns, but you'd have that same race condition in
your app code using a more traditional 3 query version as well.

I often use CTEs like this to make things atomic.  It allows me to
remove transactional code out of the app and also to increase
performance by reducing the back-and-forth to the db.
http://omniti.com/seeds/writable-ctes-improve-performance


Craig Ringer explained some of the pitfalls of this approach here:

http://dba.stackexchange.com/questions/78510/why-is-cte-open-to-lost-updates

which is a follow up question based on this: 
http://stackoverflow.com/a/8702291/330315

Thomas





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