Frustration: What can I do?

I hate when my sister yells at her kids. I love my sister, I would do anything for her kids, but when she yells at them, telling them that she hopes that she does scare them, she's glad they're crying, I know that there is nothing I can do without making it worse on the kids.
Why does she do that? Does she REALLY THINK that yelling at her kids, making threats that are never carried though, is going to make them respect her and behave? Does she? How can she? What can I do to help?
I just left one yelling scene. I got up from the dinner table (yes, the dinner table) look right at my sister and said, very calmly, "I don't have to listen to yelling." Now she is probably mad at me, but I don't really care. I DO NOT have to listen to her yell. Though I do, since she lives with us and our walls aren't exactly sound proof.
Most mornings I wake up to the sound of her screaming at her children, for whatever reason. It can be anything from them leaving a cup somewhere to the fact that they can't find their shoes.
As I type this, I hear my niece (who was the recent victim of yelling) laughing. I guess it's a good thing that children really do know how to forgive and forget.