Dear Mojca:

It was being set in my .bashrc file.  I have not used fink in years, so I am afraid I do not remember if fink put it there.  In any case, I removed it and restarted the shell, and TEXMFCNF no longer appears in the output below:

$ export | grep TEX
declare -x TEXMF="/Users/bruceb/.texmf-config:/Users/bruceb/.texmf-var:/Users/bruceb/Library/texmf:/sw/etc/texmf-config:/sw/var/lib/texmf:/sw/share/texmf-local:/sw/share/texmf:/sw/share/texmf-dist"
declare -x TEXMFCACHE="/tmp"
declare -x __CF_USER_TEXT_ENCODING="0x1F6:0x0:0x0"
$ 

...and yet, the problem persists -- again no matter how the --context flag is set.

Would it help if I sent you the full output of the following command?

$ sh ./first-setup.sh --modules=all --engine=luatex

It seems to contain many, many soft errors of the form

resolvers       | globbing | confusing filename, name: 'ChangeLog', lower: 'changelog', already: 'CHANGELOG'

and

resolvers       | resolving | looking for 'texmfcnf.lua' on weird path '/Users/bruceb/context/tex/texmf-osx-64/bin/texmf/web2c' from specification 'selfautoloc:/texmf/web2c'

and

l.40    \c!method=\v!none]
                        
! Undefined control sequence.
<argument> \c!state 
         =\v!start 
\xprocesscommaitem ...ocesscommaitem \else \if ]#1
                                                  \@EAEAEA \gobbleoneargumen...
<argument> \c!state =\v!start , \c!title 
                              =, \c!printable =\v!yes , \c!scope =\v!local , \c
\xdogetparameters #1]->\xprocesscommaitem #1
                                            ,],\@relax@ 

Best regards,
Bruce


> On Dec 15, 2015, at 8:47 AM, Mojca Miklavec <mojca.miklavec.lists@gmail.com> wrote:
> 
> On 15 December 2015 at 13:47, Bruce Boghosian wrote:
>> 
>> $ export | grep TEX
>> declare -x TEXMFCNF="/sw/share/texmf/web2c/texmf.cnf"
> 
> You need to remove that environmental variable.
> 
> In case that it was deliberately set by Fink, please file a bug report
> to Fink because they should not do that. (If you added that variable
> yourself, then remove it from .bash_profile or wherever you set it.)
> 
> Mojca
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