Permission denied @ dir_s_mkdir /users/avatars | Localhost

I used paperclip for all my previous projects, but for the first time i'm getting the error

Permission denied @ dir_s_mkdir

path = remove_tailing_slash(path)
if mode
  Dir.mkdir path, mode
  File.chmod mode, path
else
  Dir.mkdir path
end

I have absolutely no idea why this is suddenly happening. I changed the folders permission, still the same.

Log

  User Load (0.3ms)  SELECT  "users".* FROM "users"  WHERE "users"."id" = 1  ORDER BY "users"."id" ASC LIMIT 1
  User Load (0.1ms)  SELECT  "users".* FROM "users"  WHERE "users"."id" = ? LIMIT 1  [["id", 1]]
   (0.1ms)  begin transaction
Command :: identify -format '%wx%h,%[exif:orientation]' '/var/folders/5y/y3_ztj_n1f1bd0rb5hz8v13h0000gn/T/ae5b47338477b229e55830edfaf08bce20140602-37437-ab9fw5.jpg[0]' 2>/dev/null
Command :: identify -format %m '/var/folders/5y/y3_ztj_n1f1bd0rb5hz8v13h0000gn/T/ae5b47338477b229e55830edfaf08bce20140602-37437-ab9fw5.jpg[0]'
Command :: identify -format %m '/var/folders/5y/y3_ztj_n1f1bd0rb5hz8v13h0000gn/T/ae5b47338477b229e55830edfaf08bce20140602-37437-ab9fw5.jpg[0]'
Command :: identify -format %m '/var/folders/5y/y3_ztj_n1f1bd0rb5hz8v13h0000gn/T/ae5b47338477b229e55830edfaf08bce20140602-37437-ab9fw5.jpg[0]'
Command :: convert '/var/folders/5y/y3_ztj_n1f1bd0rb5hz8v13h0000gn/T/ae5b47338477b229e55830edfaf08bce20140602-37437-ab9fw5.jpg[0]' -auto-orient -resize "50x50>" '/var/folders/5y/y3_ztj_n1f1bd0rb5hz8v13h0000gn/T/ae5b47338477b229e55830edfaf08bce20140602-37437-ab9fw520140602-37437-152szmh'
Command :: file -b --mime '/var/folders/5y/y3_ztj_n1f1bd0rb5hz8v13h0000gn/T/ae5b47338477b229e55830edfaf08bce20140602-37437-ab9fw520140602-37437-152szmh'
Binary data inserted for `string` type on column `avatar_content_type`
  SQL (0.2ms)  UPDATE "users" SET "avatar_content_type" = ?, "avatar_file_name" = ?, "avatar_file_size" = ?, "avatar_updated_at" = ?, "updated_at" = ? WHERE "users"."id" = 1  [["avatar_content_type", "image/jpeg"], ["avatar_file_name", "10157398_10202612742173645_1388012856_n.jpg"], ["avatar_file_size", 66603], ["avatar_updated_at", "2014-06-02 12:35:15.545966"], ["updated_at", "2014-06-02 12:35:15.726139"]]
   (0.5ms)  rollback transaction
Completed 500 Internal Server Error in 247ms