This term describes the 'all-the-way-forward' handlebar position most commonly seen on BMX bikes in urban areas of the United States.
Rather than having the handlebars in a vertical position (as the more practical BMX riders tend to do), the individual who chooses the 'chicago' position instead prefers to lay his or her handlebars all the way forward in an attempt to do any or all of the following things:
1. Allow more knee room on a bike which is far too short for them, possibly because they are a 7-foot tall, 52 year old alcoholic who is riding their grandchild's Wal-Mart bike to the beer store at dawn on a Monday
2. Look 'cool' on an overly small bicycle, which is near-impossible, especially when the rider is visibly frustrated by this situation, and having apparent difficulty controlling said bike.
3. Create the illusion of having a 'low rider' bike, but without making any actual low rider modifications.
All chicago bars ever did was make BMX bikes harder to ride, and cause an untold number of unnecessary faceplants in the ghetto, and under certain circumstances, they may even alert the police to possible cracktivities in the area, due to the obvious fucktardation on the part of these clueless bike riders.
Hahaha! Did you see that guy with his bars almost rubbing the front tire? WTF?
Yes I did; that's because we're in the hood. Now stop sweating that chump's chicago bars and tell that baby on the corner to stop selling weed.