Getting the following error on Mac OS X? Read on.

fsevent/fsevent_watch.c:1:10: fatal error: 'stdio.h' file not found

XCode 4.3 and later does not install unix tools, so the usual header files are missing.

The following bit of magic is needed:

sudo xcode-select -switch /Applications/

Re-run your gem install / bundle and it should work now.