- The system ruby is now version 2.0 (was 1.8).
- Homebrew has hardcoded paths to Ruby 1.8.
To fix:
sudo ln -s /System/Library/Frameworks/Ruby.framework/Versions/2.0 /System/Library/Frameworks/Ruby.framework/Versions/1.8
- Download and install the 10.10 command line tools from https://developer.apple.com/downloads/index.action - look for "Command Line Tools (OS X 10.10) for Xcode"