What could cause touch to fail with this error message?
touch: cannot touch `foo': No such file or directory
Note that an error due to incorrect permissions looks different:
touch: cannot touch `foo': Permission denied
Following sequence causes this error message:
In another terminal:
In the previous terminal:
Of course, other events that also result in invalidating the current working directory (CWD) of a process that tries to create a file there also yield this error message.