A theory is presented which allow us to accurately calculate the critical coagulation concentration (CCC) of hydrophobic colloidal suspensions. For positively charged particles the CCC's follow the Hofmeister (lyotropic) series. For negatively charged particles the series is reversed. We find that strongly polarizable chaotropic anions are driven towards the colloidal surface by electrostatic and hydrophobic forces. Within approximately one ionic radius from the surface, the chaotropic anions loose part of their hydration sheath and become strongly adsorbed. The kosmotropic anions, on the other hand, are repelled from the hydrophobic surface. The theory is quantitatively accurate without any adjustable parameters. We speculate that the same mechanism is responsible for the Hofmeister series that governs stability of protein solutions.