Conundrum

So I'm walking to the grocery store yesterday when I had a racially perplexing moment. While pushing my daughter's stroller across the street, a Camry pulled up to the two-way stop sign and then slowly proceeded to block the crosswalk and ramp. The driver was an older Middle Eastern woman who clearly wasn't paying attention to us. I couldn't tell if she was trying to position herself to back into a parking space or trying to get a better view so that she could speed across the busy six-lane street. Since I didn't know what her plans were I couldn't decide whether or not to go in front or behind her car.

On the other side of the street I see this old White guy on the corner and he starts yelling at her. Move the goddamn car back! I thought he was mad because she was blocking him from crossing, but she was actually his ride and he was telling her (in a really evil, "I used to be a wife beater" way) that she was blocking our way. I crossed in front of her car and kept on walking and as he's opening the car door to get in I catch a part of their conversation.

Her: What did you say?
Him: I said move the goddamn car back!
Her: I was waiting for you to get in.
Him: You were in the middle of the fucking crosswalk.
Her: So?
Him: You were blocking people's way.

Now at this point I'm like, Well that was nice of him to point that out to her. I don't think he had to curse her out like that, but whatever.
Then I hear the next part...

Her: What people?
Him: You didn't see that nigger right there trying to cross the street?

My brain: Wait a minute...what just happened?

There are so many things wrong with that conversation, but what stands out to me is that this old White guy got in a car with a Middle Eastern woman who I think was his wife. He scolded her for being inconsiderate and blocking my way. Then he referred to me as a nigger. Is this like a racist brain teaser or something? My brain couldn't come up with a suitable response other than to just keep walking. I'm certain of what he said, I just don't understand what he said.