In my first installation, I got the same problem too, it takes too much time in "setting up master repo". You can see it through "activity monitor" that it actually is downloading, but it seems the connection is slow from their server.
Try these following steps, it solves my problem:
1. pod setup
It will do " setting up master " again, don't wait, continue these steps below
2. Ctrl +C
3. pod repo remove master
4. cd ~/.cocoapods/repos
5. git clone --depth 1 https://github.com/CocoaPods/Specs.git master
It takes around 5 minutes for me (I think it depends on internet connection), then I can do "pod install".
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